ISA Season 2012/13 - Not All Doom and Gloom
Difficult times for savers?
If you've had a look at any of the papers recently, you'll probably have noticed a general aura of doom emanating from the finance pages when it comes to ISA rates leading up to 5th April 2013. Martin Lewis of Moneysavingexpert.com has even questioned whether they'll be an ISA season at all this year, and in some ways he's got a point.
Usually, by this point in the tax year, banks, building societies and other ISA providers are practically fighting each other to offer the best rates and attract new customers desperate for somewhere to stash their cash before the 5th April deadline.
Subdued ISA season
However, this year it's been decidedly quiet, with even the best instant access rates on offer barely breaking the 2.5% mark, in comparison to offerings of up to 3.3% this time last year. And that's just the cash ISAs - fixed rates, traditionally a mainstay of reasonable returns for the longer term saver, are at a historical low, too.
Structured deposits offer an alternative
An alternative to fixed rate bonds, that's likely to be popular with savers willing to take a bit more risk this season, are structured deposit schemes. These savings vehicles offer the chance to expose your money to the stock market (and benefit from any rise) while protecting your initial deposit under the FSCS capital protection scheme up to £85,000. Currently, structured deposit plans are offering potential returns of up to 7% per year.
Get a head start and look to the future
While this may not be the greatest ISA season on record in terms of rates on offer, that's no reason not to hunt for the best deal you can find. For most of us, savings and investments are best viewed over the longer term. As Merryn Somerset Webb of Moneyweek points out, perhaps the entire concept of 'ISA season' is a fallacy. After all, according to Webb: "If we all invested regularly - every month by direct debit - or if we didn't all leave things to the last minute, there would be no need for it."* The take-home message is that if you don't use your ISA allowance, you will lose it. Even though rates aren't at their best right now; it's still worth using your allowance and taking advantage of the associated tax benefits.