Savers raided their cash Isas in April at the fastest monthly rate since the tax-free accounts were introduced in the late nineties, official data shows.
April is traditionally the busiest month for Isas, with the start of the financial year usually seeing early bird savers opening new accounts and filling their tax-free allowance.
However, appetite for cash Isas waned with customer deposits dropping by £2.8 billion to a total of £226billion during the month, Bank of England figures have revealed.
Cash Isa deposits have soared to almost £230billion in the years since the financial crisis hit. However the total held in the tax-free wrappers went into reverse in April.
It comes just a month after Chancellor George Osborne announced in the Budget that the amount which can be saved into a cash Isa will almost treble on 1 July – from £5,940 to £15,000.
The dip is being blamed on a number of factors, including savers holding off until July to decide what to do with their money when the new allowance kicks in or perhaps more funds being invested into stocks & shares ISAs? The fall in savings also coincides with a rise in first-time buyer numbers and it may be that young people, or their parents, have raided accounts to get on the ladder.
Perhaps fed-up savers might be looking to alternatives, including current accounts, to house cash in order to get a better return?
Two years ago, the average best buy easy-access cash Isa was 2.84 per cent compared to 1.31 per cent now.
In the pick of the fixed-rates, Nationwide Building Society has a 2.05 per cent two-year fix while Coventry Building Society has a 2.75 rate for four years.
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