Friday Nationwide update with account singled out as many 'lose £1,861'

Nationwide has been praised in a new update released on Friday morning. Savers are being warned to review where their money is deposited as significant disparities between the highest and lowest-paying Cash ISA accounts are causing people to miss out on thousands of pounds in tax-free interest. That's according to fresh analysis from Defaqto , which revealed savings rates have remained comfortably above 4% since the Bank of England maintained the Base Rate at 3.75%. The alert comes as savers confront a "use it or lose it" deadline on the current £20,000 Cash ISA allowance before regulations tighten from April 2027, when the threshold will drop to £12,000 for those under 65. Experts warn that individuals who don't capitalise on this year's higher allowance risk losing the chance to protect thousands more in savings from taxation. If you deposited the full £20,000 allowance into one of the highest-paying five-year fixed Cash ISAs, you could earn nearly £1,900 more in interest than someone opting for one of the lowest-paying options, according to Defaqto's latest analysis. The highest-paying five-year fixed-rate Cash ISA deal is currently from Nationwide, offering a rate of 4.60%. The lowest-paying fixed rate for the same period is 3.00%, which would deliver £1,861.03 less over five years. Katie Brain, banking expert at Defaqto, said: "Cash ISAs remain an important way for savers to protect their interest from tax, particularly while savings rates remain relatively high. What's striking at the moment is the size of the gap between the best and worst paying accounts, which means failing to shop around could cost savers thousands over the long term. "We're also seeing more flexibility in the market, with savers able to split their ISA allowance across different products to balance access and returns. But with the Cash ISA allowance due to reduce from April 2027, this year is particularly important for anyone looking to maximise the amount they can hold tax-free." Defaqto advised savers to think about how likely they are to require access to their funds before committing to longer-term deals, and encouraged people to compare rates thoroughly, as variations between providers remain substantial. Katie added: "Before committing, think carefully about your needs. Consider how likely you are to need access to your money, whether you might exceed your Personal Savings Allowance, and how long you can afford to lock funds away." Make the most of your allowance early: The sooner you deposit, the longer your money can grow tax-free. Consider splitting your ISA: Use a mix of easy-access, fixed and tracker ISAs to balance flexibility and returns. Check your Personal Savings Allowance: If you're likely to exceed it, a Cash ISA becomes even more valuable. Understand access restrictions: Fixed ISAs often limit withdrawals, while easy-access accounts may have lower rates. The latest Defaqto data reveals competitive rates across all principal Cash ISA categories: Easy-access Cash ISAs: Top rates reach 4.25% AER (Atom Bank), with numerous providers grouped around 4.10% and 4.15% AER, offering savers flexibility while avoiding tying up funds. Fixed-rate Cash ISAs: Rates remain at a premium, with up to 4.60% AER available on longer-term fixes (Nationwide). Even shorter-term arrangements remain robust, including 4.54% AER for one-year fix (Charter Savings). Lifetime ISAs (LISAs): Cash LISAs continue to deliver competitive returns alongside the government bonus, with rates up to 4.35% AER (Moneybox). Tracker Cash ISAs: An expanding sector of the market, Tracker Cash ISAs now provide rates at 4% (Manchester and Newcastle Building Society) with products directly linked to the Bank of England Base Rate. Defaqto maintains the UK's most comprehensive financial product database, delivering independent expertise, insights, tools and technology to help everyone make smarter financial decisions.