Use your Cash ISA allowance

Cash savings almost always will do better in a Cash ISA. Generally the interest rates are better and, of course, you get the interest free of tax. Since you can arrange to have immediate access to the cash in an ISA, it makes virtually no sense not to have as much of your cash in possible in Cash ISAs. In this tax year (2011/2012) each individual can put £5,340 into a Cash ISA. After the 6th of April this maximum rises to £5,640. This ISA allowance cannot be carried forward into another tax year. If you do not use your 2011/12 ISA allowance, you have lost it. Aim for an interest rate of between 2.5% and 3.0%. Note: You also have your Stocks and Shares ISA allowance, which is available for you to use if you are willing to take the risk.