Over 50s: beware of ISAs aimed at you
From tomorrow, new tax-free savings limits kick in for anyone aged 50 or over on 5 April 2010. Banks have rushed out special ISA accounts for the over-50s, but you'd probably be better off with a normal ISA.
From tomorrow, new tax-free savings limits kick in for anyoneaged 50 or over on 5 April 2010 so if you are 49 and a half, this affects you too. Isa limits for these people will rise from the current £7,200 to £10,200, with up to £5,100 allowed in a cash Isa.
As a result, banks and building societies have launched a wide range of deals with labels that suggest they are aimed at older savers. But, as is so often the case with financial products, a lot of this is just marketing - most of these "specially for the over-50s" products aren't any good.
For example, Principality Building Society's 50 Plus Fixed Isa pays an unimpressive 3.8% until June 2012 that's 0.4% less than its standard one-year Isa.
Article continues belowTry 6 free issues of MoneyWeek today
Get unparalleled financial insight, analysis and expert opinion you can profit from.
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
So don't be suckered into investing your money in these accounts when the chances are you'd get a far better deal with an ordinary Isa. The rules on Isas can seem complicated but that's no reason to get bamboozled into taking out an Isa with a poor interest rate. See my article from last week for a full explanation of the new rates: Protect more of your money from the taxman.
Also, it might be worth waiting a week before investing, because by then all the new deals will be out and competition may have driven up the rates available.
