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Making the Most of Your Tax-Free Savings

by Northern Life

Philippa Farebrother-Dunn, Head of Retail at Marsden Building Society, talks us through the importance of tax-free savings.

Saving money is crucial for financial well-being, and Individual Savings Accounts (ISAs) could be a great tool to help maximise your savings. With these accounts, your savings can grow tax-free, providing a boost to your overall savings over time. At the Marsden, we take pride in our growing portfolio of ISAs, which now includes new and flexible options for our savers. So, if you’re looking to make the most of your savings, an ISA could be just what you need.

Why ISAs are important

ISAs can be a good way to maximise your hard-earned money. Unlike traditional savings accounts, where the interest earned is taxed in-line with the Personal Savings Allowance, ISAs allow you to save up to £20,000 tax-free, regardless of the amount of interest accrued on your ISA savings. With ISAs, you can be confident that your savings will grow without worrying about tax implications, as long as you don’t exceed the annual allowance, which is currently £20,000 for the 2024/2025 tax year.

Tailoring ISAs to your goals

Different ISAs cater to various savings goals. We have a variety of ISA accounts to suit different saving styles and preferred access, including:

  • Fixed Rate Cash ISAs, which allow you to save tax-free over a fixed term, with a fixed rate of interest. You cannot make deposits or partial withdrawals during the fixed period.
  • Easy Access Cash ISAs, which enable you to save tax-free while making regular deposits and withdrawals. These can be ideal for short-term savings goals or rainy-day funds, but your remaining ISA allowance will reduce with each withdrawal.
  • Notice Cash ISAs, which require a set notice period to withdraw funds making them ideal for savers who don’t require immediate access but wish to receive a higher interest than with an easy access account.

It’s important to note that the ISA allowance comes with a ‘use it or lose it’ policy…

Make the most of your tax wrapper

Most people have a Personal Savings Allowance (PSA), which enables basic-rate tax payers to earn up to £1,000 a year (£500 for higher-rate tax payers) in interest without paying tax on the interest earned. Additionally, ISAs come with their own allowance that’s separate from the PSA, which means that the interest earned in an ISA does not count towards your PSA.

The tax wrapper provided by ISAs can help future-proof your savings against tax, especially if you’ve accumulated a significant amount of savings over the years. It’s important to note that the ISA allowance comes with a ‘use it or lose it’ policy, so any unused allowance cannot be rolled over into the next tax year.

Beyond tax advantages

The benefits of ISAs extend beyond tax breaks. They encourage disciplined saving and empower you to achieve a set savings goal. Whether you’re saving for a dream holiday, a wedding or a comfortable retirement, ISAs could be a great way to help make it happen. You can still access your money, as you don’t have to lock up your cash for a set period. Most easy-access accounts enable you to withdraw your cash as and when you need it.

Tax-free Savings

However, keep in mind that when you’re able to withdraw you can still only deposit up to the ISA allowance limit. This means that if you deposit £5,000 and then withdraw £1,000, you’ll still have used up £5,000 of your ISA allowance, unless you have a Flexible Cash ISA.

New ISA products at the Marsden

We’re excited to announce the launch of our two new ISA accounts – the Flexible Cash ISA and the Tracker Cash ISA Bond.  These accounts are designed to cater to the evolving savings needs of our members.

The Flexible Cash ISA

Our new Flexible Cash ISA allows savers to withdraw and replace funds within the same tax year, without impacting their annual ISA allowance. As it’s an easy-access ISA, account holders can deposit or withdraw funds regularly. This caters to those who may need occasional access to their savings without sacrificing the tax-free benefits of an ISA.

For example, if a customer invested £20,000 into the Flexible Cash ISA, then withdrew £10,000 they would still have £10,000 available to pay in to the Flexible ISA for the current tax year.

The Tracker Cash ISA Bond

The Tracker Cash ISA Bond is another exciting addition to our savings products. Once a customer opens a Tracker Cash ISA Bond, the money is locked away for a set amount of time. The interest rate on this account is variable and linked to the Bank of England base rate. This means that the interest rate can go up or down in-line with any base rate changes. It’s important to note that partial withdrawals are not permitted with this account and interest is paid annually.

More information about our ISA products, and how to apply, can be found at Please note, products can be withdrawn without notice.