Cash savings increase in July

There was a ‘strong increase’ in cash savings in July 2014 following the introduction of New Individual Savings Accounts (NISA), according to the British Bankers’ Association (BBA).

The BBA data reveals that savers deposited £4.9 billion more into ISAs in July 2014 compared to June 2014.

NISAs allow customers to save up to £15,000 a year tax-free and give the option of transferring stocks and shares ISAs to cash ISAs.

Richard Woolhouse, chief economist at the BBA, said:

“The banks have been working with the government to help rebuild Britain’s savings culture. So it’s really encouraging to see evidence of savers taking advantage of the new cash ISA regime in the latest figures.

“Savings were a little low during the first half of 2014, but it seems people were just waiting until the new rules came into effect to invest their money.

“Initiatives like NISA are steps in the right direction but today’s household savings ratio is half that of our parents’ generation. More still needs to be done.”