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Isa rates hit record lows as end of tax year draws nearer

The average easy-access Isa on the market pays just 0.24%, Moneyfacts.co.uk said.

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Easy access Isas now pay just a quarter of what they did two years ago, according to Moneyfacts.co.uk (Nick Ansell/PA)

Easy access Isas now pay just a quarter of what they did two years ago, according to Moneyfacts.co.uk (Nick Ansell/PA)

Easy access Isas now pay just a quarter of what they did two years ago, according to Moneyfacts.co.uk (Nick Ansell/PA)

Easy-access Isas now pay just a quarter of what they did two years ago typically, analysis has found.

The average easy-access Isa rate on the market in February pays just 0.24% – compared with 0.96% in February 2019, according to Moneyfacts.co.uk.

It said all cash Isa rates, across the different types it analysed, are now at record lows.

Isa savers often start looking to use up their current annual savings allowance around this time of year, or for new deals to potentially open in the next tax year, which starts on April 6.

The maximum total amount that a saver can newly put into Isas in the 2020/21 tax year is £20,000.

(Savers) could still get a better rate by switching, especially if they have their money stored away in a convenient easy-access account with their high street bankRachel Springall, Moneyfacts.co.uk

The average one-year fixed Isa rate is just 0.42%, compared with 1.37% two years ago.

Longer-term fixed Isas lasting more than 550 days offer savers returns of 0.61% on average, down from 1.60% in February 2019.

The average interest rates are based on savers having £5,000.

Rachel Springall, finance expert at Moneyfacts, said there are 82 fewer Isa deals around than a year ago, with 323 deals now available.

In total, Moneyfacts counted a record low 1,387 savings deals, including Isas, on the market, which is 398 fewer deals available than a year ago.

Moneyfacts’ electronic records started in 2007.

Ms Springall said: “The fall, however, should not deter savers from comparing deals as they could still get a better rate by switching, especially if they have their money stored away in a convenient easy-access account with their high street bank.

“Challenger banks and building societies continue to offer some of the best returns but savers would be wise to act with speed to take advantage of the top deals.”

PA


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