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I am lucky enough to have over £130,000 saved in five various easy-access cash Isas.
I keep all of them at the highest rates available at the time and below the £85,000 safety net.
This means I regularly have to set up a new Isa transfer when one approaches this limit.
Is this the best way to manage my savings, or can you suggest another way?
I am a basic rate pensioner taxpayer and have maxed out Premium Bonds.
Our reader has a £130,000 savings pot between five easy-access Isas and having to constantly manage them is becoming a chore
Helen Kirrane of This is Money replies: You have built up a healthy tax-free savings pot, but it sounds like a lot of work managing five Isas to ensure you stay below the £85,000 Financial Services Compensation Scheme limit while at the same time ensuring your savings are getting the best rates available.
It is worth pointing out here though that the limit is rising to a far bigger £120,000 from 1 December 2025 – which could help you out.
The best easy-access cash Isa currently pays a handsome 4.55 with the Active Savings platform frpm Hargreaves Lansdown*.
With one base rate cut anticipated before the end of the year, now is a good time to review your savings.
For expert advice on how you could simplify your cash Isa holdings, This is Money spoke to Anna Bowes, of financial planning firm The Private Office and Andrew Hagger, founder of personal finance website MoneyComms.
Anna Bowes relplies: It’s great that you are being sensible and keeping your cash split between providers in order to keep it with the FSCS limit.
But with £130,000, you don’t need to split it between five providers. Instead, you could consolidate your accounts and split it between two, which would make managing your cash Isa portfolio much more straightforward.
Splitting your cash and placing it with the top accounts available at the time is the best way to make your cash work as hard as possible – but you do have to keep active and switch if something more competitive comes along, especially if you hold variable rate accounts.
With the possibility of interest rates peaking – at the last Bank of England meeting there was a narrow vote of 5-4 to keep the base rate at 4 per cent with the minority wanting a rate cut – if you don’t need access to all of your Isa cash, locking some of it away for a fixed term might be a sensible move.
And, even though you’re a basic rate taxpayer, it’s worth noting you may not need to keep everything in Isas.
As a basic-rate taxpayer, remember you can earn up to £1,000 a year in savings interest outside an Isa without paying tax. That might give you a little more flexibility if you find a better non-Isa savings rate
For example, the top one-year bond for a deposit of less than £25,000 is paying 4.46 per cent with app-only bank LHV.
A deposit of £22,400 at this rate would produce interest of £999 before tax – within the Personal Savings Allowance (PSA), assuming you don’t have other cash in non Isa accounts already utilising your PSA.
Meanwhile the same amount in the top one-year Issa paying 4.28 per cent with Vida Savings, would produce £959 in tax free interest.
So a combination of cash Isas and non Isa savings accounts could help you to squeeze as much as possible from your savings.
There is another option that you could also consider, and that it to use a cash savings platform.
A cash savings platform could make managing your money easier. These platforms let you hold and switch between accounts from different banks under one umbrella, meaning just one application and one login.
This can help you to simply stay within FSCS limits and quickly move to better rates.
Options such as Hargreaves Lansdown’s Active Saving or Insignis Cash offer access to several Isa providers, though they’re not ‘whole of market’ and may charge fees, so it’s worth comparing before you sign up.
Andrew Hagger replies: As a pensioner, keeping your savings in cash Isas makes perfect sense giving you a combination of tax-free interest without stock market volatility risks.
You say you keep your Isa cash in easy access accounts, but I wondered if you’d ever considered putting some of your tax-free savings in a fixed rate Isa to save you having to switch so frequently.
Looking at current fixed rates, you can lock in for one year at 4.28 per cent with Vida Bank and 4.27 per cent with Investec, both are FSCS protected up to £85,000, with the former allowing transfers in of existing Isa products.
On a two-year fixed Isa, Vida Bank pays 4.12 per cent and Hampshire Trust Bank 4.1 per cent both offering the option to transfer in existing ISA balances.
I’m assuming that you’ll want to keep some of your Isa savings easily accessible in case of emergencies, but that said you can access some or all your Premium Bonds balance within just a few days if needed.
Also remember that as a basic rate taxpayer you can earn £1,000 per tax year in interest from non-Isa savings accounts, so as a guide that’s a balance of £25,000 at 4 per cent interest or £20,000 at 5 per cent.
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