No Interest in Easy Access Cash ISAs

By: MoneyFacts

As the Government attempts to regenerate ISAs, the expectation for them to pay decent returns has grown. However, Moneyfacts.co.uk can reveal that not only does the ISA market remain under a gloomy cloud, but the average rate of an easy access ISA has now hit its lowest rate on record.

Charlotte Nelson, Finance Expert at Moneyfacts.co.uk, said:

“Considering the savings market has recently seen a return to positivity, it’s hugely disappointing to find that ISA rates are still falling, with the average easy access ISA plummeting to its lowest rate on Moneyfacts.co.uk’s records.

“The savings market has been boosted by challenger banks, which have been competing heavily on price. However, these new kids on the block have yet to make their mark on the ISA market and this lack of competition is leading to stagnation.

“ISA savers who have done all they can to get the best rate and shelter their returns from the taxman are wondering when they are likely to get a reprieve, but it seems that providers are reluctant to boost rates in this key market.

“With new tax rules for savings coming into play in 2016, which will make all interest earned up to £1,000 tax-free*, ISAs have the potential to lose their main selling-point. This then begs the question, what will happen to the ISA market if this lack of competition continues?”

*For a basic rate taxpayer.

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