In the past 12 months, £11billion worth of cash has been withdrawn by ISA savers to pay for day to day living, according to Abbey Savings.

This figure is almost triple the amount that was withdrawn in the previous year as more than seven million people raiding their savings with the average ISA saver withdrawing more than £1,500, compared to an average of £579 in the previous year.

Reza Attar-Zadeh, director of savings and investments at Abbey, is not surprised that more money have been withdraw in the last year, he said: “There’s no denying it’s been a tough year so it’s understandable that people have turned to their savings in these trying times.”

Abbey has revealed 39 per cent of ISA savers made withdrawals to pay the cost of general living expenses, while 13 per cent have used their ISA because of redundancy or a reduction in their income.

Families with young children also appear to have relied heavily on their ISA savings withdrawing around £4,000 in the last year.  

Commenting, Mr Attar-Zadeh, believes this demonstrates the importance of having savings.

“The sharp increase in the amount that people are withdrawing shows that many of us may have needed our savings to make ends meet, and just goes to highlight the importance of having savings to fall back on.”

However, with the new ISA limit for over 50s just weeks away, Mr Attar Zadeh is urging savers to think carefully before withdrawing any of their savings.

“It’s vital that we all keep some money aside in the event of an emergency but raiding your ISA account can prove costly in the long term as what you take out you can’t replace,” he added.

From October 6, the cash ISA limit will be extended by £1,500 to £5,100, while over 50s will be able invest an extra £3,000 in a stocks and shares ISA as the allowance will be increased to £10,200.

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© Fair Investment Company Ltd