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Expert: Secure loans in Isas
25 September 2007
Securing a personal loan in an individual savings account (Isa) should be "the first port of call" for all financial consumers, according to an industry expert.
Securing the money in an Isa allows the consumer to divide the money to use it how they wish, as well as have the full protection of the Financial Services Compensation Scheme (FSCS), should anything happen to their bank or building society, financial advisers AWD Chase de Vere said.
The FSCS covers up to £35,000 in any account in case of financial uncertainty, which is an amount which could be similar to a personal loan. Tax-free mini cash Isas could also be used for small loans, as £3,000 can be paid in during the financial year.
Susan Hannums, savings manager for AWD Chase de Vere, said: "You should ensure that you use your Isa allowance – that should be your first port of call for your savings. They also fall into that [below £35,000] remit so you get a little bit more peace of mind."
According to figures from HM Revenues and Customs, over 10 million mini Cash Isas were held between April 2006 and April 2007, with an average of £2,180 in each account.
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