Aug 5 2008
Parents and grandparents who have used Isas as a means for saving for children may have found the funds useful in the recent economic squeeze, according to figures released today.
Research from Abbey Savings has found £6 billion has been taken out of Isas in the past 12 months, amounting to over a quarter of the average Isa balance for the 2006-07 tax year.
While nearly a third (31 per cent) of savers said they withdrew the money to pay for everyday costs, 13 per cent used the money to help family or friends.
This may indicate children are benefiting from the Isas.
Furthermore, over a quarter (26 per cent) said they spent withdrawn funds on "luxury" items such as a car or holiday.
However, the company's director of savings and investments has advised against "dipping" into Isas.
"With a cash Isa allowance of £3,600 per tax year any withdrawals made can not be replaced", said Reza Attar-Zadeh, adding that "the advice must be to try and reduce your outgoings rather than dip into your ISA pot".
The average amount withdrawn from Isas is £579.
