The Best Cash ISA Rates for Over 60s in the UK

Explore the best cash ISAs available for UK citizens over 60.

Updated: May 26, 2024
Matt Crabtree

Written By

Matt Crabtree

|
Rebecca Goodman

Edited By

Rebecca Goodman

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Are you aged over 60 and looking for an easy way to save money efficiently? Aside from regular savings accounts and fixed-rate savings accounts, some of the best cash ISAs can give your savings a little boost.

Best of all, if you choose a cash ISA you'll be able to benefit from a tax break – and you won't pay tax on the interest you make.

Each ISA has unique terms, eligibility criteria, and rates and everyone has an allowance of £20,000 to put away into an ISA each tax year.

We've put together a list of the best cash ISA accounts specifically for people living in the UK who are aged 60 or over, in the below tables.

What is a cash ISA (individual savings account)?

A cash ISA is a savings account which anyone can open in the UK. It works like a standard savings account but with a cash ISA, there are tax benefits.

You won't pay tax on any interest you earn on money kept in a cash ISA, as long as you follow the rules. This means they are a great way to save, and there are lots of different types to choose from. You can choose a fixed-rate cash ISA, where the rate of interest is set, or a variable-rate cash ISA, where the interest rate can change for example.

Also Read: Best Cash ISAs

Who can benefit from individual savings accounts?

Individual savings accounts, or ISAs, are a useful way to save money because they are tax-free. Here are some of the groups of people who could benefit from opening one:

  • Retirees aged over 60: if you're thinking about stopping work, a cash ISA is one way to boost your savings. You don't need to lock your money away for a long time and they can provide a safe home for your retirement savings.
  • Savers with tax-efficient savings goals: as ISAs are tax-efficient, they are a great way to keep more of the money you make from interest.
  • Long-term investors: you can choose to put your money away into an ISA for a longer period, such as five years. You'll earn interest on it but remember you usually won't be able to access the money.
  • First-time homebuyers: an ISA is a great way to save for a first home, you could also use a Lifetime ISA which can be put towards a first home or your retirement savings.
  • Parents saving for their children: if you're looking for a tax-efficient way to save for your children, an ISA is one option.
  • Self-employed workers and freelancers: as self-employed workers don't get workplace pensions, using a cash ISA is one way they can save for their retirement.
  • Individuals seeking financial flexibility: there are lots of options with cash ISAs so you can choose the account that most suits your savings goals.
  • Savers willing to lock cash away: if you have the money you would like to lock away, putting it into a fixed-term cash ISA is one way to do it, and you'll earn tax-free interest on it.

Also Read: What Is An Innovative Finance ISA?

How do cash ISAs for over 60s work?

Although cash ISAs are similar to regular savings accounts, you'll see that they work slightly differently.

For most cash ISA savings accounts, you can deposit £20,000 each tax year, between April 5 to April 6 the following year. You can earn interest on your ISA savings and you won't pay tax on it.

A few ISA accounts are more flexible than others, allowing you to access your funds at any point (and without penalty). Other ISA accounts will lock your savings over a specific timeframe.

It's possible to transfer funds from an old ISA to your new account but to avoid losing tax-free benefits, check the regulations of the account and follow the specifications.

Also Read: How Many ISAs Can You have?

What are the Best cash ISA rates for over 60s?

If you want to put money into a cash ISA, and you're aged 60 or over, one of the most important things to look at is the rate of interest paid, as this will show you how much your money could grow within the term of the account. Here we've picked out some of the best cash ISAs to choose from.

Instant-access cash ISAs

With an instant-access cash ISA, you can take money out whenever you need it. They are a good idea if you know you may need the cash but they often pay a lower rate of interest than fixed-rate cash ISAs.

Here are three of the best options to consider:

Cash ISA ProviderInterest Rate (%)Minimum Deposit (£)
1. Plum5.17 (fixed)1
2. Moneybox5.16 (fixed)500
3. Chip5.10 (fixed)1

1. Plum Cash ISA

Plum's cash ISA pays 3% on £1 and when you have £100 in the account (or more) it pays 5.17%. The interest rate includes a bonus of 0.86% for 12 months. It's a mobile account and interest is paid monthly. If more than three withdrawals are made within a year the interest rate will drop.

  • Interest rate: 5.17% (fixed)
  • Minimum deposit: £1
  • Protection scheme: Financial Services Compensation Scheme (FSCS)

2. Moneybox Cash ISA

The cash ISA from Moneybox pays a set rate of interest of 5.16% but there is a 0.91% bonus for the first 12 months. It can be opened and managed via the provider's app and if more than three withdrawals are made in a year the rate of interest will drop.

  • Interest rate: 5.16% (fixed)Minimum deposit: £500Protection scheme: Financial Services Compensation Scheme (FSCS)

3. Chip Cash ISA

The cash ISA from Chip, which is provided by ClearBank, pays a set rate of 5.10% interest, on anything over £1. There are no restrictions on the number of withdrawals you can make.

  • Interest rate: 5.10% (fixed)
  • Minimum deposit: £1
  • Protection scheme: Financial Services Compensation Scheme (FSCS)

Notice cash ISAs

A notice cash ISA works in a similar way to a fixed-rate cash ISA, but the time period where money is locked away is usually shorter.

Here are three of the best to consider right now:

Notice ISA ProviderInterest Rate (%)Minimum Deposit (£)
1. West Brom Building Society5.10 (fixed)1
2. Furness Building Society5.01 (fixed)1000
3. Teachers Building Society5 (fixed)1000

1. West Brom Building Society WeBSave 60-Day Notice ISA

The West Brom BS WeBSave 60-day notice ISA (Issue 2) pays a fixed rate of 5.10% interest. It can be opened and managed online.

  • Interest rate: 5.10% (fixed)
  • Minimum deposit: £1
  • Protection scheme: Financial Services Compensation Scheme (FSCS)

2. Furness Building Society 90-Day Notice ISA

The 90-day notice ISA from Furness Building Society pays a fixed rate of 5.01% interest. It can be opened at a branch, or by post, and also managed on the phone.

  • Interest rate: 5.01% (fixed)
  • Minimum deposit: £1,000
  • Protection scheme: Financial Services Compensation Scheme (FSCS)

3. Teachers Building Society 120-Day Notice ISA

The 120-day notice ISA from the Teachers Building Society pays a set rate of interest of 5% and it requires £1,000 to open. It can be opened online or by post and also managed on the phone.

  • Interest rate: 5% (fixed)
  • Minimum deposit: £1,000
  • Protection scheme: Financial Services Compensation Scheme (FSCS)

Fixed-rate cash ISAs

If you choose to lock away your money, you can usually get a better rate of interest. Right now the highest rates of interest with fixed-rate ISAs are from the 12-month accounts.

However, make sure you won't need your money during the term of the account. If you do take your money out you will usually lose interest and the account may close.

Here are three of the best to choose from:

Fixed-Rate Cash ISA ProviderInterest Rate (%)Minimum Deposit (£)
1. Virgin Money5.05 (fixed)0
2. Punjab National Bank4.80 (fixed)1000
3. Oak North Bank4.72 (fixed)1

1. Virgin Money One-Year Fixed Rate Cash ISA

The one-year fixed-rate ISA from Virgin pays a set rate of 5%. But it's only available to people who also have a Virgin Money current account.

  • Interest rate: 5.05% (fixed)
  • Minimum deposit: £0
  • Protection scheme: Financial Services Compensation Scheme (FSCS)

2. Punjab National Bank Fixed Rate ISA

The cash ISA from the Punjab National Bank pays a set rate of 4.80% for 12 months. It can be opened and managed in a branch or by mail.

  • Interest rate: 4.80% (fixed)
  • Minimum deposit: £1,000
  • Protection scheme: Financial Services Compensation Scheme (FSCS)

3. Oak North Bank Fixed Rate Cash ISA

The cash ISA from Oak North Bank pays a set rate of 4.72% for 12 months. You can open one with £1 and it can be opened and managed via the app or with online banking.

  • Interest rate: 4.72% (fixed)
  • Minimum deposit: £1
  • Protection scheme: Financial Services Compensation Scheme (FSCS)

Key features to consider when choosing suitable ISAs

Cash ISAs for people over 60 have a range of features that make saving easier.

Here are the main features to consider when selecting this account type.

  • Interest rates: Your cash ISA might offer you high-interest rates, especially if you intend to keep your funds locked in the account for a longer period of time. Just make sure you're not locking away money you may need to get your hands on.
  • No large minimum deposit: There are lots of cash ISAs to choose from, including those which require small deposits to open.
  • Secure funds: Since the Financial Services Compensation Scheme (FSCS) protects your funds (up to £85,000), you have greater security no matter if the financial institution you save with fails.
  • Eligibility criteria: You will have to meet the eligibility criteria to apply for one of these accounts. Typically, criteria include being a UK resident, having a national insurance number, and being over 16 or 18, depending on the account provider's terms.
  • Variable rate: Many of these accounts offer variable interest rates. With a variable rate, the amount you earn on your savings can fluctuate. Your account provider will inform you when the rate increases or decreases. Each account will vary in terms of the notice you will receive.

Advantages and disadvantages of cash ISAs for over 60s

A few advantages and disadvantages apply to cash ISAs for those over 60.

Check the lists in this section to learn which pros and cons to weigh when finding accounts to save efficiently.

Advantages of cash ISAs for over 60s

✔️ Tax-free benefits — You won't pay tax on any interest you earn from money within a cash ISA. This is the case for any type of ISA, including stocks and shares ISAs and a Lifetime ISA.

✔️ Transferrable accounts — If you're transferring from one cash ISA to another new one, you won't face any restrictions. Swapping from one account to another is possible, so you can gain the advantages of the perks of a new account. Just remember to transfer the money correctly – if you withdraw it yourself you may lose the tax benefits.

✔️ Various options are available — From easy access cash ISAs and innovative finance ISA options to fixed rate cash ISAs, many options are available. You can select an option that perfectly aligns with your financial circumstances.

Disadvantages of cash ISAs for over 60s

❌️ Capped deposits — When you deposit money, remember that the maximum amount you can invest each tax year is £20,000. Any amounts higher than this will require you to open a new account. Some specific ISAs also have lower limits on the amount you can put away, such as Junior ISAs.

❌️ Inflation can hinder saving value — In times of high inflation, you may notice that the value of your money declines in your account.

Alternative accounts to cash ISAs for over 60s

A cash ISA won't be for everyone and there are lots of other options for savings and investing.

Here are some of the other types of accounts you could choose from:

  • Fixed-rate bonds: with fixed-rate bonds, you earn interest on your savings for a set period of time, which can be up to five years.
  • Regular savings accounts: with regular savings accounts, you put away a set amount each month, such as £400, and you earn interest on the cash.
  • Notice savings accounts: with notice savings accounts, your money is locked away, earning interest, for a set period of days.
  • Stocks and shares ISAs: with stocks and shares ISAs, you can benefit from tax-free investing, up to the annual ISA allowance of £20,000.
  • Peer-to-peer lending: with peer-to-peer lending, you can lend money to individuals or companies through a P2P company, not through a bank. You can often earn more interest but there may not be the same level of protection on your cash.
  • Buy-to-Let and property funds: another way to make money is through buy-to-let investing and property funds, although these have more risk than a cash ISA.

What are the differences between cash ISAs for over 60s and other savings accounts?

The main difference between a cash ISA and another type of savings account is the tax-free element. With a standard savings account, you will pay tax on any interest you earn. But the unique benefit of a cash ISa is you won't pay tax on any interest that you earn.

Martin Lewis's suggestions for ISAs for over 60s

The original Money Saving Expert, financial expert, Martin Lewis, picks out his tips for the best cash ISAs to choose from. In his article, he selects a range of cash ISAs with details about the interest rates paid and also other features of the accounts.

Advanced strategies for maximising ISA returns

There are a few tips and tricks if you want to make your money work harder for you and earn more interest.

These include always going for an account with the highest rate of interest and following the ISA rules. This includes transferring ISA allowances through providers – and not withdrawing the money yourself.

You can also earn more by maximising your ISA allowance – as your allowance is only valid for one tax year.

Related Guides:

FAQs

What bank has the highest ISA interest rate in the UK?

What is the impact of economic changes on ISA rates?

How to transfer ISAs from one provider to another?

Do banks notify HMRC of savings interest?

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