ISA savers urged to use allowances

ISA holders are being encouraged to make the most of their tax-free allowances for the 2011/12 period.

Commenting in the Daily Telegraph, Rosie Murray-West highlighted the impact which high inflation is currently having on those attempting to build up nest eggs for themselves.

Despite falling in June, the Office for National Statistics (ONS) has revealed that the consumer prices index still reached a level of 4.2 per cent last month.

In light of the current financial climate, Ms Murray-West stated that savers without ISAs, who are liable to pay tax on the interest their money accrues, may find it hard to contend with high rates of inflation.

She said: "This makes it more important than ever to use your tax-free cash ISA allowance."

According to the ONS, a five per cent rate of retail prices index inflation was also witnessed in the year leading up to June 2011.

However, this compared favourably with the previous month's reading of 5.2 per cent.

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