5th October 2015
Despite the government’s attempts to get the nation saving new research shows that the average rate on an easy access ISA has now plummeted its lowest level on record.
Data from Moneyfacts.co.uk shows that in October 2007, ISA savers could enjoy a typical rate of 5.48% – a level unheard of for years.
But today, the average is a paltry 1.11% according to the group.
|Average Easy Access ISA Rate||5.48%||1.75%||1.30%||1.18%||1.11%|
Charlotte Nelson, finance expert at Moneyfacts.co.uk said: “Considering the savings market has recently seen a return to positivity, it is 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.
Nelson added: “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?”