Savers returns on Isas dwindling….
Bash the cash
Savers who are maxing out their cash Isas are getting pitiful returns a year.
The average rate of Isas is currently hovering at around 0.82 per cent. This compares to cash Isas from 10 years ago paying 5%.
Even if a saver invested their Isa at the max £15,240, the maximum interest-free allowance, they would earn just £125 interest on average.
Fundamentally in real terms, taking inflation into account (just under 2%) your cash is losing value!!
With the introduction of a “personal savings allowance” – where basic-rate taxpayers can earn up to £1,000 tax free and higher rate taxpayers earn £500 tax free – has made Isa’s irrelevant for many.
The government owned National Savings & Investments bank further hit savers when it recently announced it was cutting rates on its direct Isa and monthly income bonds from 1 per cent to 0.75 per cent.
The high street banks have no reason to compete with better deposit rates for you when Isas are providing such low real returns.
The annual interest-free savings allowance rises to £20,000 in April and there are probably better deals for one year money than a cash Isa.
So look around…..!
If you want to speak to an Adviser, Enquire here
