11th January 2016
While the arrival of 2016 has undoubtedly prompted many to review their financial situation and resolve to put more aside more money for a rainy day, would be savers are unlikely to be encouraged by the paltry rates on offer.
In fact research from Moneyfacts.co.uk shows that the average easy access ISA rate has fallen by 0.19% from two years ago to stand at just 1.06% today, the lowest level the group has ever recorded.
Charlotte Nelson, finance expert at Moneyfacts.co.uk, said: “Savers wanting to start building a nest egg will look towards highly flexible easy access savings accounts and ISAs but anyone looking at the rates available today will perhaps question the benefit of saving at all.”
Back in 2013 the top paying easy access ISA paid 2.75% yearly, but the best rate today is only 1.50% – a significant 1.25% less. Standard easy access savings accounts do not fair any better, either, with the top rate falling by 0.68% from 2013 to just 1.65% today according to Moneyfacts.co.uk
Nelson added: “For a long time ISAs have been the go-to product for not only some of the best rates but also for the tax shelter they provide.
“However, with the new tax rules for all savings accounts coming into play in April, ISAs are likely to lose some of their attraction, meaning low rates are likely to become more, not less, prevalent.
“With such a glum outlook, savers are pinning their hopes on a base rate rise this year but as money from the Funding for Lending Scheme still needs to be spent, the potential boost to savings rates by a rise in base rate could be weak to non-existent.”
|Average No Notice Rate||0.83%||0.62%||0.65%||0.65%|
|Average Easy Access ISA Rate||1.52%||1.25%||1.13%||1.06%|
|Source: Moneyfacts.co.uk||Compiled: 11.1.16|