Brits plan to deposit £33.3 billion into cash ISAs

The tax year, which comes to an end on 5 April 2012, offers people the chance to deposit up to £5,340 into their cash ISA and earn tax-free interest.

According to the findings, this year the average person will use less than half of this maximum allowance, depositing an average of £1,883, rising to £2,199 for over 55s.  From 6 April the cash ISA allowance will increase to £5,640.

With a number of cash ISAs available on the high street, research shows that more than two thirds (68 per cent) of people with a cash ISA would prefer one with a fixed rate of return - guaranteeing their rate of interest - compared to just 14 per cent who prefer a variable rate of return.

Interestingly, more than half of those with cash ISAs (56 per cent) would be willing to lock their cash away for 12 months or more if it enables them to earn a better rate of return or a cash bonus. This compares to just 37 per cent of people who favour access to their cash, even if the return is less.

Matt Hall, Head of Savings at Santander, commented:

"It's not surprising to see that many savers prefer the certainty and peace of mind that comes with a fixed rate of return. And it makes sense for people to keep all their ISA money in one place and seek the highest guaranteed return on it, even if this means locking away their money for a year or more.

"That's why all Santander ISAs allow transfers in, enabling our customers to consolidate their ISA money into one account.  What's more, our fixed rate ISAs allow deposits of the 2012/13 cash ISA allowance until 14 April, so savers can maximise their return without worrying about having different ISAs maturing at different times.

"With 5 April being just round the corner, I would urge people to use their ISA allowance sooner rather than later and not leave it until the last minute."