Savers face lacklustre Isa rates
A lacklustre Isa season will leave savers having to work extra hard in the coming weeks to seek out the best deals, experts have warned.
Those who want to make the most of their new annual tax-free cash Isa allowance of £5,760 from April 6 will struggle to find anything which beats the eroding effects of inflation.
Financial information website Moneyfacts said that the top fixed-rate Isa deal on the market at the moment has a rate of 3.1% and is being offered by the Halifax, but savers need to be prepared to lock their cash away for five years to get this product. A year ago, people could have got an easy access Isa deal which would have beaten this rate.
Returns on savings have been driven down by four years of ultra-low interest rates, but analysts say the situation has been made worse in recent months because lenders have been less reliant on attracting savers’ deposits following the launch of a Government scheme to help borrowers.
The Funding for Lending scheme was launched in August and gives lenders access to cheap finance. Isa seasons traditionally see a flurry of activity, during which providers up the ante on their best deals as savers decide which Isa (individual savings account) they are going to invest in as the new tax year approaches.
The annual Isa allowance is non-transferable, which means that if a saver does not use it up in one tax year it cannot be carried over.
Moneyfacts spokeswoman Rachel Springall said: “There has not been the battle that we have seen in previous Isa seasons. We have seen some launches but it is not as competitive.
“Normally at this time of year providers would be upping their bonuses. That’s not something we have really seen this year at all.”
According to Moneyfacts’ “best buy” tables, the top easy access cash Isa is a deal at 2.8% from the Coventry Building Society. This matches the current rate of inflation. This time last year, the top rate on a similar deal would have been 3.5%.
The possibility of the Funding for Lending scheme being extended has been raised, which would spell further bad news for savers.
In a further blow to those searching for better returns, Treasury-backed savings provider NS&I announced that it would not be offering its inflation-busting index-linked savings certificates until April next year at the earliest.
NS&I had to withdraw index-linked savings certificates for new customers in 2011 after a flurry of savers looking to take them out meant their popularity put it in danger of breaching its targets.
Latest posts by Silversurfer's Editor (see all)
- Spiced Beef, Pumpkin and Carrot Soup - October 21, 2017
- Perfect vacation in Dubrovnik with Valamar - October 19, 2017
- Do you suffer from joint pain? - October 17, 2017
- Live-in Carers Help Elderly Get Online to Combat Loneliness - October 16, 2017
- Win An E-Bike Worth £999 From Edge.Bike! - October 16, 2017
Leave a Comment!
Community Terms & Conditions
These content standards apply to any and all material which you contribute to our site (contributions), and to any interactive services associated with it.
You must comply with the spirit of the following standards as well as the letter. The standards apply to each part of any contribution as well as to its whole.
be accurate (where they state facts); be genuinely held (where they state opinions); and comply with applicable law in the UK and in any country from which they are posted.
Contributions must not:
contain any material which is defamatory of any person; or contain any material which is obscene, offensive, hateful or inflammatory; or promote sexually explicit material; or promote violence; promote discrimination based on race, sex, religion, nationality, disability, sexual orientation or age; or infringe any copyright, database right or trade mark of any other person; or be likely to deceive any person; or be made in breach of any legal duty owed to a third party, such as a contractual duty or a duty of confidence; or promote any illegal activity; or be threatening, abuse or invade another’s privacy, or cause annoyance, inconvenience or needless anxiety; or be likely to harass, upset, embarrass, alarm or annoy any other person; or be used to impersonate any person, or to misrepresent your identity or affiliation with any person; or give the impression that they emanate from us, if this is not the case; or advocate, promote or assist any unlawful act such as (by way of example only) copyright infringement or computer misuse.
Nurturing a safe environment
Our Silversurfers community is designed to foster friendships, based on trust, honesty, integrity and loyalty and is underpinned by these values.
We don't tolerate swearing, and reserve the right to remove any posts which we feel may offend others... let's keep it friendly!