Martin Lewis is warning Britons to take advantage of their ISA allowance as the deadline for tax-free cash looms.
The financial expert said those who are “bigger savers” should use their allowance now before they “lose it” at the end of the tax year.
Lewis said: “You need to use your 2022/23 tax year ISA allowance by April 5 - the end of the tax year - or you lose it."
“A cash ISA is just a savings account where the interest is never taxed.
Martin Lewis advised his viewers on the three best cash ISAs on the market
PA
“You can put up to £20,000 in each tax year and once it’s in it stays tax-free year after year.
“So, you can put £20,000 in now if you’re lucky enough to have it, then on April 6, another £20,000, and in a year’s time, another £20,000.”
In an example, he said: “You’d have £60,000 plus interest protected from tax, which is why some people who have been doing it for years have hundreds of thousands of pounds protected from tax.”
“They’re the type of people it’s best for. Cash ISAs are best for bigger savers.”
He added: "It’s not worth it if you have £5,000 to £10,000 or £500 or £10 because most people don’t pay tax on savings anyway.
"You can earn £1,000 of interest tax-free under the personal savings allowance if you’re a 20 percent taxpayer, and it’s £500 if you’re a higher-rate 40 percent taxpayer.
"Unless you have a lot of savings, you won’t earn that anyway. Normal savings account rates are higher, so you would earn more in those."
Lewis also provided the best three cash ISA accounts on the market.
Brits could save tax-free money with a cash ISA
PA
His top account, Cynergy’s Easy Access Online cash ISA (Issue 31), is offering an Annual Equivalent Rate (AER) 3.05 percent.
The Money Saving Expert founder added: “You can put your money in and take it out when you like if you need to.”
For anyone wanting to fix a cash ISA, Lewis suggests Shawbrook Bank’s One Year Fix at 4.06 percent, as well as Barclays One Year Flexible Cash ISA with four percent AER.
He described this account as “more interesting”, as it allows people to make up to three withdrawals.
“You can’t normally withdraw from fixed rate savings. So even if you didn’t need the tax advantage, a fix that you can withdraw from is decent,” he said.
The ISA deadline also applies to other ISAs, including those of stocks and shares.
