Finance Roll

Recent changes to the amount of money savers over 50 can deposit into their Individual Savings Accounts (ISAs) are seeing record numbers of people making full use of the new regulations. But those who are not eligible, such as those who do not meet the minimum age requirement, are finding less favorable returns available on their savings and are refusing to put their money away - could we be putting our money to better use?

Savers over 50 can now deposit up to £10,200 (half of which must be in cash, the other half in stocks and shares) into their ISAs, whereas before this limit was capped at £7,200. According to research recently published by Nationwide, the new limit - which will be rolled out for everyone in April - has attracted more savings than expected, despite the fact they have been in place for just one month.

Despite this optimism among banks and older savers, research from Abbey has found that huge groups of people cannot afford to save. In data published recently, 28 percent of parents were seen to have no savings at all, while 20 percent of those asked admitted they had less than £1,000 to save which they could use in a financial emergency.

The research has prompted advice from all corners of the money market, with banks eager to highlight the importance of so-called 'rainy day' funds and independent money experts urging people to shop around for the best savings deals before they settle, and for those who already have accounts to review their rates and to consider changing if they see a better deal elsewhere.

The next few months are a particularly good time to start researching different types of savings accounts. New regulations mean that banks and building societies must give at least two months notice to savers before they cut rates, while trends towards efficiency, simplicity and transparency are emerging in the finance sector as banks and buildings societies are eager to appeal to prospective savers at a time when rates are so low.