Stocks and shares ISAs let you put money into shares and other investments without paying income tax or capital gains tax on growth. Returns could be far higher than with a cash ISA, but the value of your money could also fall if your investments perform poorly.
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Compare the best cash ISAs for over 60s
Find the right place for your savings if you are over 60
What is a cash ISA for over 60s?
If you are looking for a safe place for your savings with some added benefits, then a cash ISA for over 60s is an option to consider.
ISA stands for Individual Savings Account and it was first introduced by the government in 1999 as a way of encouraging people to save. The government said that this type of savings account would avoid any income tax, but there would be a limit on how much you could save in one each year.
For example, in the 2023/24 tax year you can put up to £20,000 in a cash ISA. You’ll then be able to earn interest on this savings pot without paying any tax.
Cash ISAs are low risk because it acts like a normal savings account."
How do cash ISAs for over 60s work?
Generally, a cash ISA for over 60s is very similar to a standard savings account but there are a few things you should consider before signing up.
The money you make in interest in tax-free
You can only pay into one cash ISA each year, but that doesn’t have to be the same account as you opened last year
There is a limit on how much you can pay into the account, for example this tax year it’s £20,000 per person.
The important part to remember with an ISA is that it works during the tax year, not the calendar year. This means the amount of money you can put in an ISA resets on April 6.
The average market value held in ISAs for the 65+ age group[1]
£46,090
Is my money safe?
The Financial Services Compensation Scheme (FSCS) guarantees that the first £85,000 you have saved with a registered bank or building society (or first £170,000 for a joint account) will be safe even if the business goes bust.
Advantages and disadvantages of cash ISAs for over 60s
Advantages
You can access your money if you need to make a withdrawal
Your savings are protected by the FSCS (up to £85,000 per bank)
A partner or spouse can take on your ISA savings too as the allowance can be passed on without impacting their annual allowance
Disadvantages
High inflation means that your money could lose value
You can earn up to £1,000 interest tax free without an ISA if you are a basic taxpayer
You are limited by how much you can save in an ISA (£20,000)
Average interest earned on £10,000 over three years in different cash ISAs
Interest earned over three years if you had £10,000 in a cash ISA.
Source: Defaqto and Uswitch. Updated: December 14
The best cash ISAs for over 60s deals
We’ve compiled the best cash ISAs for over 60s deals currently on the market so you can see which provider might best suit your needs.
Editor’s pick
One of the highest interest rates for a regular cash ISA
The Nottingham Starter ISA Issue 11
Open with
£10 to £1,600
Interest rate
5% AER fixed
Term
05 Apr 2024
Withdrawals, closure and transfers out permitted subject to 180 day interest penalty.
Show Details
Eligibility
Maximum Age
Unlimited
Minimum Initial Deposit
£10
Permanent UK Resident
YES
Rate Tiers
| Gross rate | |
|---|---|
| Including bonus | Excluding bonus |
| 5% | 5% |
| AER rate | |
| Including bonus | Excluding bonus |
| 5% | 5% |
Editor’s pick
One of the highest interest rates for notice cash ISA
Marsden Branch Cash ISA 180 (Issue 1)
Open with
£1,000
Interest rate
4% AER variable
Term
Notice
Withdrawals permitted subject to 180 days' notice. Closure permitted subject to 180 days' notice or 180 days' interest penalty.
Show Details
Eligibility
Maximum Age
Unlimited
Minimum Initial Deposit
£1,000
Permanent UK Resident
YES
Rate Tiers
| Gross rate | |
|---|---|
| Including bonus | Excluding bonus |
| 4% | 4% |
| AER rate | |
| Including bonus | Excluding bonus |
| 4% | 4% |
Editor’s pick
One of the highest interest rates for fixed term cash ISA
UBL UK 2 Year Fixed Rate Cash ISA
Open with
£2,000
Interest rate
4.65% AER fixed
Term
2 years
Withdrawals are not permitted during term. Transfers out and closure permitted subject to 180 days loss of interest.
Show Details
Eligibility
Maximum Age
Unlimited
Minimum Initial Deposit
£2,000
Permanent UK Resident
YES
Rate Tiers
| Gross rate | |
|---|---|
| Including bonus | Excluding bonus |
| 4.65% | 4.65% |
| AER rate | |
| Including bonus | Excluding bonus |
| 4.65% | 4.65% |
The editorial team regularly checks and evaluates the top picks on this page, updating them at least fortnightly.
What are the alternatives to a cash ISA if you’re over 60?
![Stocks and shares ISAs]()
Stocks and shares ISAs
Stocks and shares ISAs let you put money into shares and other investments without paying income tax or capital gains tax on growth. Returns could be far higher than with a cash ISA, but the value of your money could also fall if your investments perform poorly.
![Standard savings accounts]()
Standard savings accounts
For standard savings accounts, your personal allowance applies and you won't pay tax on the first £1,000 of interest you earn if you're a basic rate taxpayer, although this drops to £500 if you're a higher rate taxpayer.
![Fixed-rate bonds]()
Fixed-rate bonds
These are fixed-rate savings accounts that allow you to invest a large sum for a fixed period, for a guaranteed return. During the fixed period, you have no access to your funds.
What are the alternatives to a cash ISA if you’re over 60?
Stocks and shares ISAs
Standard savings accounts
For standard savings accounts, your personal allowance applies and you won't pay tax on the first £1,000 of interest you earn if you're a basic rate taxpayer, although this drops to £500 if you're a higher rate taxpayer.
Fixed-rate bonds
These are fixed-rate savings accounts that allow you to invest a large sum for a fixed period, for a guaranteed return. During the fixed period, you have no access to your funds.
Investment ISAs put your capital at risk so this means you could get back less than you originally invested.
Discover Raisin UK
Raisin UK* is a free and easy-to-use service that allows you to view and manage your savings in one place. It has a variety of partner banks offering fixed rate bonds, notice accounts and easy access savings accounts, with different term lengths and features.
The whole process of finding the right savings account is simple with Raisin UK, so you can sit back, relax and watch your money grow.
*We have a paid partnership with Raisin so we may receive a small commission if you click on a deal and then purchase it.
Cash ISAs for over 60s FAQs
How does Uswitch choose its editor’s picks?
We know that the best deals are always changing, so the editorial team at Uswitch regularly checks the rates on this page and updates them at least fortnightly. To find the best deals we compare products by taking various factors into consideration, like the interest rate (AER), the balance needed to get the highest interest rate, minimum initial deposit, withdrawal conditions and the term of the account as applicable. These factors change subject to the category.
We use this system for the whole of the market covering nearly all, so you can get an overview of what the banks and credit unions are typically offering in the UK. All the banks featured are FSCS protected, so you can be reassured that your money is safe, provided it’s within the defined limits and regulations. To find out more about how FSCS looks after your money, visit fscs.org.uk.
How do I find the best cash ISA for over 60s?
It's worth looking around for the best cash ISA for over 60s by using our top picks and considering all the options in the market.
Remember, take the time to read all the terms and conditions before signing up so that you understand any restrictions that might be in place.
Is my money safe in a cash ISA for over 60s?
Yes, the Financial Services Compensation Scheme (FSCS) is in place to ensure that your money is protected up to £85,000. For extra peace of mind, it’s best to check with your bank that they are covered by FSCS.
How many ISAs can I have?
In terms of how many ISAs you can have, you can only pay into one of each type of ISA (cash, stocks and shares, lifetime and innovative finance ISA) during the same tax year.
Are my finances checked when I open a savings account?
No, they are not checked. This means you can still open an ISA if you have bad credit.
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References
1. Gov.uk annual savings statistics: The average ISA market value at the end of 2019 to 2020 in the 65 and over group was around £46,090