Act now to profit from your new higher Isa limit

SAVERS get their new cash Isa allowance of £5,640 on Saturday, when the next tax year begins.

It is a time to ensure the money put in at the start of this tax year, which started last April, continues to earn a decent return.

If you took out an easy-access account with a short-term bonus, you will see your rate drop to below the headline rates of 3 pc plus.

And if you have a fixed-rate deal coming to a close, move your money — or you could earn as little as 0.1 pc. Consumer group Which? estimates savers who fail to move their £5,430 allowance from this current tax year will miss out on £85 interest over the next year if they fail to shift their money.

Those who have built up ten times this amount since Isas were first introduced can end up losing up to £850.

April is one of the best months to move, because banks and building societies are offering top rates to scoop up Isa savings as one tax year ends and another begins.

Not all banks and building societies will accept transfers of existing cash Isa money.

What happens to your fixedrate cash Isa at the end of the term and the rate you earn depends on your bank or building society and your account.

At Santander, your account can become a variable rate Cash Isa earning just 0.1 pc on balances up to £27,000 and 0.5 pc at £50,000. It currently pays 4 pc to new savers taking out a two-year fixed-rate.

With Halifax, the rate drops to its Isa Variable rate of 0.5 pc. Those who took out its fixed-rate Isa three years ago will see their rate drop from 3.2 pc to 0.5 pc. But move to its current threeyear fixed-rate deal and you will earn 4.25 pc.

At Lloyds TSB, which now pays up to 3.7 pc on its two-year fixed rate cash Isa to new savers, the rate tumbles to 1 pc.

On easy-access accounts, rates also plunge after the initial bonus vanishes. For example, in February last year, Halifax launched its ‘best buy’ easy-access account, Isa Direct Reward, at 3 pc. But once you have been in the account for a year, the rate drops to the bank’s Isa Direct rate of just 0.5 pc.

Savers who took out AA Internet Access Isa, a top payer this time last year at 3.35 pc, will see their rate fall to 1.7 pc once they have been in the account for a year.

To switch your cash Isa, fill in the application form from your new Isa provider and ask it to arrange the transfer. Your transfer should be completed within 15 working days.