Investors in the north lose out on Isa tax benefit

The product director for Scottish Friendly warned that unless more people took the opportunity presented within a stocks and shares or cash Isa – even to set aside a small amount each month – they would be losing out on their yearly tax allowance.

He pointed to data collated by the friendly society, which showed that savers in the south-west of the UK were making the most of their tax allowance.

According to the data, collated from those investing into the society’s My Choice Isa, those living in the south-west of England put away £434 a year – equating to £36 a month.

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Investors in the north-east and Yorkshire are lagging behind, with an average of just £311 being put away each year, equal to £26 a month. The Welsh have an average saving of £323 a year, around £27 a month.

He said: “There is no ‘one-size-fits-all’ Isa; it is a tailored product that can suit a variety of earnings. Even with an average saving of £376 a year being put away, the potential rewards, although not guaranteed, can be really impressive. Our friends in the south-west have got the right idea: the key is to invest what you can, as often as you can.”

Overall, across the country, a total of £1.4m has been invested in the Scottish Friendly My Choice Isa since it was launched last year.

According to HM Treasury, there are more than 24m Isa accounts holders, while 49.4 per cent of the adult population hold one or more Isa accounts – possibly a cash Isa and a stocks and shares Isa.

Adviser View

Danny Cox, head of financial planning for Bristol-based Hargreaves Lansdown, said that while Isas were generally a success story, he believes improvements to the rules would encourage more people to save and invest.

He said: “Savers and investors lack dedicated products to protect themselves against the costs of long-term care. So-called “pre-funded” long-term care insurance failed as it was expensive and people were concerned that if they did not claim, they would lose the premiums paid.

“A long-term care Isa allowance – that can be drawn upon in the event of needing nursing care but passed onto your beneficiaries, IHT-free, if not required – would encourage people to set aside money for nursing care in the knowledge that, if they did not require care, their savings would not be lost.”

South west £ 434.35
Greater London £ 424.09
Strathclyde/D&G £ 393.07
North west £ 388.75
South east Eng £ 378.35
Midlands £ 371.51
East £ 351.95
East Scotland £ 350.76
Highlands £ 349.29
Northern Ireland £ 337.83
Wales £ 323.16
North east/Yorkshire £ 311.77