Intelligent Finance - Press Release

31 March 2003

8 MILLION SET TO 'DASH FOR CASH' ISA IN 2003/4

The majority of people planning to take out an ISA in 2003/4 will opt for a mini cash ISA in preference to bonds or stocks and shares, according to ICM Research for Intelligent Finance.

Some 54% of UK adults - 7.7m people - who are planning to take out an ISA in the next financial year say they will opt for cash, with a further 26% plumping for bonds, and just 20% saying they will invest in stocks and shares.

Commenting Grenville Turner, Chief Executive, Intelligent Finance said:

"People looking for a cash ISA in year ahead can come to Intelligent Finance knowing our rate guarantee will make their money work harder for them. You can open an ISA with us with as little as £1 and make contributions as and when you can afford them. Our account has a great rate, is tax efficient and still allows you to get your hands on your money whenever you need."

ISA take-up set to rise in 2003/4

31% of UK adults - 13.95 million people - claim they are planning to use their tax-free savings allowances in the year ahead.

This figure is significantly up on the 11.9 million who took out ISAs in 2001/2 and ahead of provisional figures for 2002/3 suggesting more people are now planning to take advantage of their tax-free savings allowances and save for the future.

Millions set to allow tax-free allowances go 'down the drain'

Nearly 12% of the adult population - 5.3 million people - have over £2,000 in savings accounts but don't plan to take out an ISA in the year ahead. Some 1.6 million of these people are sitting on over £10,000 in cash yet still seem set to ignore the benefits of a tax-free wrapper. This despite the fact that many mini cash ISAs offer instant access and better rates than traditional savings accounts.

Women keener on cash

Women across the UK are more likely to opt for a mini cash ISA in the year ahead with 19% of the female population as opposed to 16% of men saying they were going to opt for the cash ISA option.

45-64 year olds perhaps unsurprisingly are also most likely to opt for the certain returns of cash with 20% saying they were going to opt for cash ISAs in the year ahead.

17% of adults unaware they can switch ISA providers

With only one of the top five paying mini cash ISAs from two years ago, still holding a spot in the top five paying accounts today - and then only on account of a 0.5% bonus - it is clear that many ISA providers have eased their rates down once they have won savers' business.

Despite this only some 5% of ISA holders have ever switched their ISA provider. The low rate of switching is hardly surprising when 7.65 million people - 17% of the adult population - who haven't ever moved didn't even know that they were able to switch their ISA providers.

For more information contact Heather Scott 0131 658 2301, 07770 643840, 01875 852925 (home) or email heatherscott@if.com

NOTES TO EDITORS

1. Intelligent Finance pays 4.05% on its mini cash ISA from £1 up. Its rate is guaranteed to be at least 0.3% above base until 5 April 2004.
   
   
2. No other bank or building society presently offers customers a guarantee to pay a rate above base on their mini cash ISA. (Source: Moneyfacts)

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