With an Individual Savings Account (ISA) offering tax-free interest on your savings, it has been a popular option for people thinking about financing their futures. For the 2019/20 tax year, the tax-free ISA allowance is £20,000 for adults and £4,368 for juniors, with different types of ISAs available based on the purpose of the account.
Here, we run through a comparison of ISA providers and present how cash ISA accounts have performed for both adult and junior savers.
The latest stats
The average amount of money per subscription for 2017/18 was £6,409, of which cash ISAs made up £5,114 (80%)
As of December 2018, the average interest rate on cash ISAs was 0.92%
As of 2017/18, approximately 15% of UK adults had a cash ISA account
Cash ISAs over time
The graphs below plot the number of cash ISA account subscriptions, the overall amount subscribed in cash ISA accounts and the average amount per subscription.
Unsurprisingly, the values for junior cash ISAs is significantly lower than the corresponding adult accounts over the given time frames. However, the trends presented for adult accounts is often different than from junior accounts.
The overwhelming trend among adult accounts is that, up to 2018, the number of accounts has decreased while the overall subscription amount has remained fairly constant. As the final graph supports, there are fewer accounts overall but, of those people that own cash ISA accounts, more money is being transferred in.
In 2018, the average amount held in an account was £5,114 for adults and £813 for juniors. During the 2012–2018 period, this was the lowest amount for juniors; in fact, it’s a 44% decrease on the 2012 numbers. In comparison, the 2018 average amount held for adult accounts was greater than the average value over the time period. Therefore, more juniors are deciding to open cash ISA accounts but appear to be able to afford to hold less in them in 2018. Meanwhile, the same accounts are becoming less popular among adults but these adults are saving more in their accounts.
While something of a juggernaut in the groceries and traditional banking sectors, Tesco Bank doesn't have quite the same aptitude for digital banking. Its app does comfortably hold its own against HSBC, TSB and first direct, but nevertheless it lags far behind the leaders in the sector, like Starling, Monzo and Revolut.
While not in the digital banking big leagues, first direct's app offers a reliable, easy way to manage your first direct accounts. Given the bank's innovative history, though, you might have expected a stronger showing in the brave new world of digital banking. Read more…
Charlie Barton is a publisher at Finder. He specialises in banking and investments products, including banking apps, current accounts, share-dealing platforms and stocks and shares ISAs. Charlie has a first-class degree from the London School of Economics, and in his spare time enjoys long walks on the beach.
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