Up to the £20,000 ISA cap, cash savings are held in the Plum Cash ISA tax-free. All consumers in the UK have access to it, and they may take use of Plum's clever automation for money management.

The Bank of England hiked the base rate to 5.25%, which has resulted in interest rates on savings reaching a 15-year high. But with income tax levels frozen, more people are being compelled to pay tax on interest earned due to rising savings rates.

 

According to the OBR, between 2022–2023 and 2028–2029, this series of threshold freezes will result in about 4 million more people being required to pay income tax, 3 million more people moving to the higher rate, and 400,000 more people onto the supplementary rate.

In light of this, UK savers are using ISAs more frequently. According to the most recent numbers released by the Bank of England, for the past 12 months, net contributions have averaged £4 billion. This is in contrast to the peak of net withdrawals of £1 billion or more in March 2017.

High street banks have maintained quite low instant access Cash ISA interest rates in spite of this. Higher rates have usually only been available with fixed-term individual savings accounts (ISAs) or, when they were, came with onerous conditions like being a current client of a specific bank.

In comparison, the Plum Cash ISA is providing the best variable rate available, which is greater than the average industry rate of 3.5%** and more than twice as high as the rates provided by the four major high street banks. To obtain the 5.15% rate with Plum, customers only need to deposit £100 into the account to begin saving.

To enable users to manage their money in one location, the product is placed among a variety of wealth-building tax wrappers that are currently accessible in the Plum app, such as its well-liked stocks and shares ISA and SIPP products. Transfer-ins will also be accepted into the Cash ISA.
 

Victor Trokoudes, the CEO and founder of Plum, says, "Our goal has been to give customers the best tools to maximize their money since day one." People can now obtain respectable returns on their cash savings, which is fantastic. However, because of high interest rates and the fact that many people are shifting into higher tax brackets, taxes on savings are becoming a bigger problem. This is unfair; regular savers shouldn't have to pay more in taxes simply because they prefer to have their money available in cash.
 

"We are thrilled to be launching our industry-leading Cash ISA because we believe in rewarding savers. Although cash ISAs are not a novel idea, we have revolutionized them by approaching them strategically, and savers can profit from Plum's automation as well. With just a few taps, you can effortlessly manage your account and keep track of your other investment and savings tax wrappers within the app. In addition to benefiting from the £20,000 ISA allowance, customers can rest easy knowing their money is safe. And they are aware that Plum is offering them the finest deal.