The deadline for the 2009/10 tax-year cash ISA allowance is midnight Easter Monday, 5 April.

With the tax year ending at midnight on Easter Monday, 5 April 2010, the public is being urged not to leave using their ISA allowance until the last minute, as many financial institutions will be closed over the Easter bank holiday weekend.

People under the age of 50 can save up to £7,200 a year tax-free in ISA accounts – £3,600 of which can be put in a cash ISA account, while over-50s have an annual allowance of £10,200 (£5,100 in a cash ISA). From 6 April, everyone will be allowed to save up to £5,100 in a cash ISA.

Kevin Mountford, moneysupermarket.com’s Head of Banking, said: “Savers could easily be caught out by some of the early deadlines. It’s not too late to use this year’s ISA allowance but you need to apply carefully in order to ensure your application is processed in time. If you don’t double-check that the account you want to apply for is still accepting applications for the current tax year, you risk losing your allowance.”

The online site has warned savers of the risks of leaving money in 2009 cash ISAs that had bonuses attached to them. The danger with some of these accounts is that once the bonus expires, savings could be left languishing in low-interest accounts.

While savers can only have one cash ISA with one provider per tax year, the money can sometimes be transferred to a different provider.

However, research by Consumer Focus has revealed that although the average cash ISA account only accrues 0.5% in interest – despite the initial one-year bonus rates – only 12% of all cash ISA holders switched their account in the last tax year.

The organisation has attributed this low number to the “poor and bureaucratic processes” used by providers, which can mean that a simple transfer to another cash ISA account takes longer than five weeks, as experienced by one third of savers.

Consumer Focus found that only one in ten people managed to transfer their cash ISA in less than two weeks.

Mike O’Connor CBE, Consumer Focus Chief Executive, said: “It beggars belief that in 21st century Britain it takes a month to transfer information and funds from one bank to another.
“Cash ISAs are designed to encourage long-term saving, but many people find their rates slashed to next to nothing after a relatively short time. Providers are using consumer inertia and confusion to drop ISA rates faster than on other accounts. The way providers inform customers about their accounts makes it difficult to get the best deal.”

Consumer Focus has issued a complaint to the Office of Fair Trading (OFT), calling for it to become mandatory that financial institutions give the name and issue number of the account, the current rate of interest, and the date at which any bonus period ends, on their cash ISA statements.

A number of organisations have listed the opening hours and deadlines of financial organisations over Easter, and some have noted the best last-minute ISA deals, including moneysavingexpert and moneysupermarket.