The savings made through new Isa allowances for over-50s are not of great value to customers, one expert believes.
Andrew Hagger, spokesperson for Moneynet.co.uk, said that although holders can now put an extra £3,000 into their tax-free savings accounts, the return is not that impressive.
Taking a "realistic" rate of three per cent, Mr Hagger calculated that the full cash Isa boost of £1,500 would return £22.50 over a six months.
However, a standard savings account paying a basic rate would offer up to £18 interest after tax in the same period, a difference of £4.50.
He commented: "It was a great headline grabber at the time, but we're not talking about a life changing sum of money here ... Perhaps the real financial impact of this move should have been given a little more thought."
Research by uSwitch.com recently showed that four Isa providers have cut savings interest rates in the few weeks leading up to the new allowances, despite the static base rate .
Isa allowances fail to deliver, expert says
Financial Services > Saving Accounts > News
Isa allowances fail to deliver, expert says
Wed, 07 Oct 2009
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