What my cash ISA bought me
Most people would love to save money throughout the year, but you may think it's difficult to start saving if you don't have much cash to put away. But never fear – even if you have a really tight budget you can still start saving for the future. Here, five mums reveal what their tax-free savings pot has meant for them
Saving with a cash ISA (Individual Savings Account) is one of the simplest ways to save, and it makes the most of your tax-free savings allowance*. And usually you can open one with as little as £1. Once you've opened a cash ISA, you can top it up as often as you can until you reach your limit for the financial year - £5,760 for 2013/2014. This is the limit for how much you can put into your cash ISA each year not the balance of the account – if you put £5,000 into your ISA, even if you take £5,000 back out again, your cash ISA limit for the rest of the year would be £760. You have to be at least 16 to open a cash ISA, but once it's open your ISA is tax free year after year.
Make sure you look at the account features of the cash ISA you choose, as the sort of access you have to your money can vary between accounts, which can be especially important if you have a particular goal for the money.
We all try to save money whenever we can, but it can help to know you're saving for something specific. That way, every time you top up your savings, you can feel the money building towards your goal.
We spoke to five women who have made saving with an ISA work for them and their families.
[*Tax-free means that the interest earned on a cash ISA is free of UK income tax, subject to ISA conditions being met. Eligibility for ISAs and the value of tax relief within them depend on your circumstances. The rules around ISAs could change in the future.]
My cash ISA bought me… time with my son
"While statutory maternity pay is great, we just didn't think it would stretch far enough, so when we found out we were expecting our first baby, both my husband and I used ISAs to save - he saved for the essentials, like a pram and a cot, and I saved so I could take extra time off work when my maternity pay finished.
"We both saved regularly each month and I ended up taking 11 months off work in total, which was great, as I just wouldn't have been ready to leave my son and return to work any earlier."
Carrie Wallace, Glasgow, mum to Logan, 1
My cash ISA bought me… the next big event in our lives
"I've had ISAs for as long as I can remember, and I have used them for a lot of the big purchases in my life – cars, house moves, even my wedding!
"I used to put money into them monthly and once I'd reached my limit, I'd just open another one the following tax year. But in the last two years, I've added lump sums, as I've had a couple of redundancy payments.
"Right now, we're saving in an ISA for a big trip away with the kids next year – either Florida or Lapland are the current favourites."
Sarah Russell, mum to Megan, 4, and Thomas, 2
My cash ISA bought me… the essentials for my new baby
"My pregnancy was a total surprise so I didn't have a special baby pot like some of my friends had, so having an ISA has been a godsend! I've had it for seven years and now I'm dipping into it to buy all the baby essentials I need, like a pram and a Moses basket, to get me through the first few months.
"I usually try to save at least £100 a month then dip into it when necessary. Just knowing I have a little reserve has really stopped me stressing about the hundreds of things we need, many of which are really expensive.
"I plan to keep putting some money by every month while I'm on maternity leave, even if it is only £20 a month. I'm also thinking of setting a Junior ISA up for the baby, too – we're going to need all the savings we can get in order to pay for university!"
Clare Bull, London, Freddie, newborn.
My cash ISA bought me… piece of mind for the future
"I have four daughters, so I could be looking at four university-goers and four brides who need helping out financially!
"I save regularly in an ISA, but I haven't withdrawn any money yet, so it's building up. It's just nice to know that if we keep adding to it and try not to take anything out, whatever the girls decide to do, we'll be able to support them, whether it's a gorgeous wedding dress or a helping hand with tuition fees – or both!"
Rachel Jones, mum to Sioned, 18, Lowri, 17, Ffion, 13, and Anwen, 11
My cash ISA bought me… a lovely new garden
"I had been saving money regularly in a cash ISA for a few years. In 2009, I decided to use some of this money to have a patio laid and a new shed built in the garden in time for my 40th birthday party, which I was hosting that summer.
"It cost about £4,000 to have done and was well worth it. It was a great party and since then I've enjoyed the past few summers sitting out on the patio. It's lovely to have somewhere to spend time outside with my friends and family.
"I'm still saving with an ISA – I haven't earmarked the money for anything in particular, but as I'm freelance, it's nice knowing the money's there for my family."
Ilana Harris, mum to Jonah, 9
Family finance, from Barclays
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