Rachel Springall, Finance Expert at Moneyfacts.co.uk, said:

“Savers have just a couple of months left until the new tax-year begins, so time is ticking for them to utilise their current ISA allowance. Thankfully, the run-up to ISA season is looking bright as rates are much more favourable than they were a year ago. Those savers who locked into a top one-year fixed rate ISA a year ago will find the equivalent top deal pays more than four times the amount of interest. Consumers who prefer a longer-term fixed ISA will be pleased to see much higher rates when they come off their current deal this year, as the top rate on a five-year fixed ISA is over 2% higher than the equivalent deal in 2018.

“It is still possible that savers may forgo using their ISA allowance due to the top returns available outside of an ISA wrapper, as many savers will find their earned interest is protected under the Personal Savings Allowance (PSA) which has been in force since 2016. However, rising interest rates could result in consumers with larger pots breaching their individual allowance, which is why ISAs offer considerably more suitable longer-term tax-free benefits. The PSA allows basic rate taxpayers to take home up to £1,000 worth of savings interest tax-free each year (£500 for higher rate taxpayers), so it’s worth comparing deals away from ISAs carefully with this in mind.

"Savers will need to check their rate regularly to keep on top of the latest rate rises and remember that they can look for an alternative deal that allows them to transfer in their current ISA to keep their tax-free wrapper intact. There are also many types of ISAs to consider away from a traditional cash ISA, such as stocks and shares ISAs and Lifetime ISAs which can be more beneficial for specific goals.”