The latest research from Moneyfacts.co.uk reveals that savers are facing the worst ISA season on record. ISA rates have hit rock-bottom lows, fuelled by the number of heavy cuts vastly outweighing any rises, with 90% of recent rate changes being cuts.

Since January, Moneyfacts.co.uk has recorded 151 rate changes for ISAs, of which 136 were rate cuts and just 15 were rate rises. Away from rate cuts there has also been a drop in the number of deals available, despite a few challenger brands entering the playing field.

Today the average ISA pays 1.29%, a fall from 1.45% a year ago and 2.39% five years ago.

Rachel Springall, Finance Expert at Moneyfacts.co.uk, said:

“It’s safe to say that ISA season has failed to make an appearance this year, with a combination of rock-bottom interest rates and a fall in the number of ISAs available meaning that many savers will lack the incentive to grab a new deal. It is however imperative for consumers to review their savings rates: with some ISAs paying a disastrous 0.10%: lots can be gained by moving to a more competitive rate of interest.

“Great deals will not be around for long because providers get inundated by consumer demand, which means they either need to cut rates or remove their offer from the market. This creates a domino effect on other providers, which has set the market into freefall.

“Grabbing a Help to Buy ISA is a must for any prospective homebuyer. The interest rates beat all other ISA deals into the ground; paying up to 4%, it’s easy to see why these accounts are a great addition to the market. Help to Buy ISAs have also been the only deals to be boosted by significant rate rises, with both Santander and Yorkshire Building Society upping their rate this year to pay 4% and 2% respectively.

“Despite a landslide in interest rates and the launch of the Personal Savings Allowance, ISAs are still a worthwhile addition to any saver’s portfolio, particularly over the long-term. There are more benefits to come, too, as in 2017 the new Lifetime ISA will enable savers to boost their pot not only for buying a home, but also to provide for the future.”

www.moneyfacts.co.uk - The Money Search Engine

Moneyfacts.co.uk is the UK's leading independent provider of personal finance information. For the last 20 years, Moneyfacts' information has been the key driver behind many personal finance decisions, from the Treasury to the high street.

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