Skip to main content
The Actuary: The magazine of the Institute and Faculty of Actuaries - return to the homepage Logo of The Actuary website
  • Search
  • Visit The Actuary Magazine on Facebook
  • Visit The Actuary Magazine on LinkedIn
  • Visit @TheActuaryMag on Twitter
Visit the website of the Institute and Faculty of Actuaries Logo of the Institute and Faculty of Actuaries

Main navigation

  • News
  • Features
    • General Features
    • Interviews
    • Students
    • Opinion
  • Topics
  • Knowledge
    • Business Skills
    • Careers
    • Events
    • Predictions by The Actuary
    • Whitepapers
    • Moody's - Climate Risk Insurers series
    • Webinars
    • Podcasts
  • Jobs
  • IFoA
    • CEO Comment
    • IFoA News
    • People & Social News
    • President Comment
  • Archive
Quick links:
  • Home
  • The Actuary Issues
  • March 2017
03

Just one in six taking advantage of tax-free personal savings allowance

Open-access content Tuesday 28th March 2017 — updated 5.50pm, Wednesday 29th April 2020

Despite being introduced nearly a year ago, only 17% of UK adults have started or increased the amount they save using a personal savings account (PSA), according to research by the Nottingham Building Society.

2

It shows that just 52% are aware of the benefit, which came into effect in April 2016, and allows basic-rate taxpayers to earn £1,000 in interest tax-free each year, and £500 for those who pay a higher-rate

However, one age group that have been taking advantage of the initiative are those aged 18-24, with 40% starting or increasing their saving since it was launched.

"Being able to earn up to £1,000 in interest tax-free is a real incentive for saving and it should encourage more people to take advantage of the wide range of accounts available," Nottingham Building Society, senior product manager, Jonathan Cartlidge, said.

"It is particularly encouraging to see that so many 18 to 24-year-olds are starting to save. We know the sooner you start to save, the better you will prepare for life's milestones.

"For example, those who have saved around £250 a month for the past five years would now have a saving pot of over £21,000. Even those who can only commit to saving a small amount each month will see their savings grow."

This comes as research from Moneyfacts.co.uk, released today, reveals that savers would receive bigger returns maximising their PSA, than they would investing in a new individual savings account (ISA).

It shows that if savers were to invest £20,000 in the best ISA or best non-ISA, neither would bring them returns greater than the lower PSA limit of £500.

Moneyfacts.co.uk finance expert, Rachel Springall, said: "It's been almost a full year since the government introduced the PSA to enable savers to earn more savings interest tax-free. While this has been an ingenious way to encourage consumers to save, it has also had a big impact on the appeal of ISAs.

"ISAs overall have been struggling to keep up with the more desirable returns that standard savings accounts have on offer, and savers have still had to endure years of low interest rates due to government lending initiatives.

"This has forced savings rates to plummet, making it vital for savers to keep on top of the best buys, and to try not to be too discouraged when it comes to saving for the future."


Sign up to our free newsletter here and receive a weekly roundup of news concerning the actuarial profession

This article appeared in our March 2017 issue of The Actuary.
Click here to view this issue
Filed in
03

You might also like...

Share
  • Twitter
  • Facebook
  • Linked in
  • Mail
  • Print

Latest Jobs

New Fast-Growing Team - Actuarial Systems Development

London (Greater)
Excellent Salary Package
Reference
143762

Actuarial Pension Consultant – Scotland/Remote – Up to £90,000 plus bonus

Edinburgh / Glasgow / Remote working
Up to £90,000 + Bonus
Reference
143761

Part Qualified Pensions Actuary– Specialised Pensions Consultancy - Scotland/Remote - Up to £70,000

Edinburgh / Glasgow / Remote working
Up to £70,000 + Bonus
Reference
143760
See all jobs »
 
 

Today's top reads

 
 

Sign up to our newsletter

News, jobs and updates

Sign up

Subscribe to The Actuary

Receive the print edition straight to your door

Subscribe
Spread-iPad-slantB-june.png

Topics

  • Data Science
  • Investment
  • Risk & ERM
  • Pensions
  • Environment
  • Soft skills
  • General Insurance
  • Regulation Standards
  • Health care
  • Technology
  • Reinsurance
  • Global
  • Life insurance
​
FOLLOW US
The Actuary on LinkedIn
@TheActuaryMag on Twitter
Facebook: The Actuary Magazine
CONTACT US
The Actuary
Tel: (+44) 020 7880 6200
​

IFoA

About IFoA
Become an actuary
IFoA Events
About membership

Information

Privacy Policy
Terms & Conditions
Cookie Policy
Think Green

Get in touch

Contact us
Advertise with us
Subscribe to The Actuary Magazine
Contribute

The Actuary Jobs

Actuarial job search
Pensions jobs
General insurance jobs
Solvency II jobs

© 2023 The Actuary. The Actuary is published on behalf of the Institute and Faculty of Actuaries by Redactive Publishing Limited. All rights reserved. Reproduction of any part is not allowed without written permission.

Redactive Media Group Ltd, 71-75 Shelton Street, London WC2H 9JQ