The ISA tax-free allowance will change this year, with savers being urged to take advantage of competitive deals
One of the country's biggest building societies is revealing how Britons can make the most out of savings interest this year ahead of looming changes to ISA rules.
Skipton Building Society is breaking down the benefits of the savings product before the £20,000 tax-free allowance attached to cash ISAs is reduced to £12,000 in April next year.
According to new analysis from the mutual, putting your full ISA allowance to work in a fixed-rate cash ISA right now could generate enough tax-free interest to cover a week-long package holiday in 2027.
Skipton's research examined what a saver depositing the maximum £20,000 ISA allowance into a one-year fixed rate cash ISA at four per cent AER could expect to earn, with calculations coming to £800 in interest.
That sum alone is sufficient to pay for a seven-night package holiday to several popular Mediterranean and Turkish destinations.
A week in Tenerife, for instance, comes in at £709 per person, while Corfu costs £726 per person. Sliema in Malta is priced at £732 per person, and the Turkish resort of Dalaman at £753 per person.
For those travelling solo, the £800 return could cover the entire cost of the trip. Families, meanwhile, could put the interest earned towards their overall holiday expenses.
Based on Skipton Building Society's analysis of CACI current account data from May 202, 80 million personal current accounts in the UK sit at a zero per cent interest rate.
Over this period, these accounts held a combined £321billion between them with billions more in interest being left off the table.
Transferring some of these balances into a competitive savings product could yield a tangible difference over twelve months at today's leading rates.
According to Skipton, this would turn dormant funds into money that actively works towards goals such as a holiday abroad.
Alex Sitaras, the head of Savings at Skipton Building Society, urged savers to reconsider where their money sits.
He said: "At a time when many are jetting off on their summer holiday, it's worth remembering that making your savings work harder can be just as effective as finding extra money to save.
"Yet millions of savers are missing out on returns that could make a difference to their plans by leaving money in little or no interest accounts.
"Everyone's goals are different, but at a time when households are looking to make their money go further, securing a competitive rate could make a meaningful impact over time."
