Regular saver or ISA?

Dotjs

Can someone please tell me which would be better for someone who saves a small amount each month- £50 for example. I get that ISAs are tax free but surely the better interest rate from a regular saver would outperform any savings made from not paying tax on an ISA.

psychic_teabag

Yes. If taxable reg saver beats ISA, just go for that. Possibly transfer the balance to an ISA on maturity and start over.

Sometimes there are regular-saver-ISA accounts, but they still don't beat the best taxable reg savers.

Milarky

My money is on a non-isa product - at least for now. The "small amount" you wish to save is one giveaway, the other is the flexibility of being able close accounts and open them more than one a year if you wanted to without dealing with the restrictions of the ISA system (which limits you - in effect - to opening no more than one account in each tax year - and certainly to funding no more than a single account in a tax year)

For £50 per month the aim is to build up a lump sum gradually from nothing. Having a marginally higher (post tax) interest from an ISA from the start makes scarcely any difference anyway to your long term position.

opinions4u

Save in a high rate regular saver.

Bang the maturity proceeds in to an ISA.