The recent savage decline in savings interest rates has hit the cash ISA market equally hard, with potential returns down sharply when compared with 2012, 2011 and 2010 best buys.
Even though the cash element of the annual tax-free savings allowance has increased by almost 13% in the last 3 years, savers are now worse off as this table highlights – Cash ISA comparison vs previous 3 years
It’s alarming to think that although you can save £660 per year more tax-free than in 2010 (£5760 vs £5100) the amount of interest you can earn in the coming tax year falls well short of the returns available at that time.
Whether you’re looking at an instant access ISA or a 5 year fix, it’s the same sorry picture.
The best 1 year fixed rate ISA from Metro Bank delivers £53.70 less than the 2012 best deal and £23.40 less than the equivalent best buy in 2010.
The difference is even more marked for longer term products with the best 4 year fix from Halifax at 3.05% paying out £66.84 per year less than its own 4.30% deal last year and £41.07 per year less than the 4.25% Nationwide BS deal 3 years ago.
With Funding for Lending causing such carnage and misery in the savings market, the Chancellor should consider giving something back to savers by way of an additional increase in the 2013/14 cash ISA allowance – but with his blinkered focus on borrowers and spenders I wouldn’t hold your breath on that one!
- Fixed rate savings – best buy rates edging upwards - September 17, 2020
- 0% Credit Card Balance Transfer terms on the slide since lockdown - July 13, 2020
- Mainstream credit card rates unchanged in 2020 – for now - June 16, 2020