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Skandia to add cash Isa as it increases rates

Skandia is adding a cash Isa on its platform and increasing the rate of interest paid on cash from 0.1 per cent to 0.4 per cent.

The move follows changes to Isas announced in the Budget which will see the annual Isa allowance increase to £15,000 from 1 July, and the ability to switch freely between cash and stocks and share Isas.

Skandia currently offers a stocks and shares Isa with a short-term cash facility bolted on. From July it will offer a full cash Isa.

It will begin paying 0.4 per cent on cash from the start of the 2014/15 tax year and is negotiating with its custodians to secure improved rates on cash on deposit. It hopes to be able to pay an increased rate on cash by 1 July.

Skandia platform manager Mike Barrett says: “We are confident, just days after the changes were announced, that our Isa will be ready for the new regime in July. In addition to a wide range of funds, our cash facility will be enhanced so that it will offer the most competitive rate possible.

“The changing structure is not only great for seasoned Isa users, but also for those who may have previously been hesitant to invest in the stock market as it allows them dip their toe in the water within a single product.”

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