National Counties Building Society launches inflation-busting ISA

Good news for savers! National Counties Building Society has launched an inflation-linked Isa, which promises to pay 1 percent above RPI until 2015.

This is the only tax-free Isa which beats RPI inflation, and provides a lifeline for higher-rate taxpayers. At a time when inflation remains stubbornly high and the government has withdrawn the only inflation proof investment, index-linked National Savings Securities, it is heartening to see one institution offering a good deal to savers.

The only drawback is that savers must be prepared to lock up their money for the full five years as no withdrawals are allowed during the term of the bond.

The minimum investment is high at £5,100, the maximum annual amount allowed for a cash ISA. National Counties will also accept transfers from other companies, so someone who has put the maximum into a cash ISA every year since their introduction will be able to inflation proof around £50,000.

Very few accounts are available at these levels. HSBC’s Regular Saver, which requires customers to hold a paid-for current account, pays 8%. There is also a Halifax children’s account paying 6% which is available only to customers under 16, and a regular savings account from Santander that requires you to hold a current account with the bank and only allows you to feed money in monthly.

For more information, visit National Counties’ website or call its Customer Centre on 0845 6034876.