Dudley Members from Across the Country Bucking the ISA Trend

12 Jul 2018

Published in: Member News

It has been mentioned by a number of industry commentators that ISAs have fallen out of favour with many consumers, but Dudley Building Society has seen increased ISA inflow from savers across the country.

The Society saw 37% of ‘new' money invested with the Society into its range of ISA accounts between the start of their corporate year in April until the latter part of June. This equates to an increase from 22% for the same period last year. This also represented almost five times more ISA transfers in from other providers than in the previous year.

Product Manager for the Dudley, Lucy Foley said: "We don't see the distinct ‘ISA season' spike as we used to, but there is still significant appetite in the market - especially with serious savers. We have made a number of adjustments to our ISA range over the past twelve months to remain competitive, and maintain a similar position in the market. It seems the impact of the Personal Savings Allowance changes introduced in April 2016 have been felt by savers in the past year when many have not had to pay tax in the same way they have in previous years."

Lucy continued: "It can be easy to compare ISA and non-ISA products and compare rates and potential returns - but a saver should take time to understand the impact that tax can have on the interest received, before making a final decision about where to channel their savings. This is even more important for the higher rate tax payers that only receive a £500 tax-free limit."

A worked example using a deposit of £75,000 when using the Society's identical one year bond and ISA rates of 1.31% would return £983 in interest but the bond would only return £786. This would particularly impact those with deposits held elsewhere that uses up their full personal allowance, resulting in the interest from the bond being subject to tax.

Higher depositors still see the value in the tax free wrapper that comes with an ISA, with a consistent inflow seen into the Society across the year.

The Society offers a range of savings accounts including instant access, notice, bonds and commercial savings options - with ISAs completing its offering.

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