Beat ISA deadline to protect your savings

SAVERS are today warned that the deadline for using their tax-free ISA allowance this year is under two weeks away.

- By Harvey Jones

If they do not use this year's £20,000 allowance by the cut-off at midnight on Saturday April 5 it is lost for good.

ISAs let you save, invest and take all your returns free of income tax, capital gains tax and dividend tax for life. They are more valuable than ever as Chancellor Rachel Reeves tightens the tax burden.

She even floated the idea of slashing the annual cash ISA allowance to just £4,000. This now seems unlikely in Wednesday's Spring Statement but it highlights how vulnerable ISAs are to changes in tax policy.

Savers can invest up to £20,000 in either a cash ISA or stocks and shares ISA or a combination.

The choice partly depends on their risk appetite. Cash ISAs offer stability but lower returns over time, while stocks and shares ISAs are more volatile but should provide a higher total return over the longer run.

With global stock markets highly volatile, the decision is tougher than ever but securing the tax benefits should be the top priority.

Cash ISAs are sold by banks and building societies. They work like a standard savings account, but the difference is that all your interest is free of tax for life.