Coventry Building Society has announced a major overhaul to its line of savings accounts for loyal customers ahead of an upcoming ISA deadline.
The 2026-27 tax year begins today, marking a crucial twelve months for savers under 65 who wish to take advantage of their £20,000 tax-free allowance.
From April 2027, the annual tax-free allowance for cash ISAs will fall from £20,000 to £12,000, whilst stocks and shares ISA limits remain unchanged at £20,000.
Chancellor Rachel Reeves introduced this reduction to encourage more investment in equities rather than cash savings. This makes the current tax year the final opportunity for younger savers to utilise the full £20,000 cash ISA allowance before the reduced limit takes effect next spring.
Coventry has launched a new range of ISA products
|GETTY
In response to the fast-approaching deadline, Coventry Building Society has unveiled two exclusive fixed-rate ISA products for existing members:
- Loyalty Fixed ISA (5) paying a rate of 4.35 per cent tax-free until September 30, 2027
- Loyalty Fixed ISA (6) paying a rate of 4.40 per cent tax-free until September 30, 2028.
Both accounts allow savers to deposit the full £20,000 annual allowance and require just £1 to open. Eligibility is restricted to customers who have held a continuous relationship with the building society since at least January 2026.
The products can be managed by customers through the building society's branches, telephone, post, online banking, or the mobile app.
ISA savers are looking to take advantage of their full tax-free allowance
| GETTYLATEST DEVELOPMENTS
The ISA limit is currently £20,000 each tax year | PAJonathan Wilson, Senior Savings Manager at Coventry Building Society, said: "With the ISA allowance for under-65s set to drop from £20,000 to £12,000 in April 2027, this tax year is the final chance for younger savers to make the most of today's higher limit."
He added: "Unlike many ISAs on the market that rely on short-term bonuses that briefly inflate rates before dropping off sharply, our loyalty range pays highly competitive rates throughout the entire fixed term."
Mr Wilson noted that members can access their accounts through whichever channel suits them best, describing the products as a straightforward way for loyal customers to grow their savings tax-free.
Research from Lubbock Fine Wealth Management reveals that British savers remain overwhelmingly cautious with their ISA choices.
How would your ISA perform if you take AJ Bell's advice? | AJ BELL Analysis of HM Revenue and Customs (HMRC) data shows that merely 10.4 per cent of cash ISA holders simultaneously maintain a stocks and shares ISA, equating to just 739,000 individuals out of 7.1 million cash ISA savers.
Andrew Tricker, the director at Lubbock Fine Wealth Management, said: "The Government significantly reduced the tax-free allowance for cash ISAs to push savers into investing, but it remains to be seen whether this will be effective."
The figures indicate that cash ISA investors tend to be highly risk averse, potentially preferring the perceived security of cash over equity investments.