You are here: Home - Saving-Banking - News -

Savers faced with losing ISA allowance or settling for lower rate

Written by: Paloma Kubiak
Rates on standard savings accounts outshine those of ISAs, meaning savers are faced with a tough choice of losing this tax-year’s ISA allowance forever or making do with a much lower rate.

The number of ISA products has risen to 311 from 303 recorded in September 2016, according to data site Moneyfacts.

This marks the first time the number of ISAs has stood above 300 since September, though it’s fallen slightly from 317 recorded in March last year.

Moneyfacts found that the long-term ISA rate has also risen for the fourth consecutive month (1.03%), though it’s a far cry from the 1.69% average rate offered in March 2016.

However, despite the positive news which raises the hopes that this year’s ISA season is showing small signs of life, Charlotte Nelson, finance expert at the data firm, said savers face a tough decision.

“Despite all the positive news surrounding ISAs, rates on standard accounts continue to outshine them. For example, the average long-term fixed rate (excluding ISAs) stands at 1.34% in March, a whopping 0.31% higher than its ISA counterpart. So, savers are now faced with the hard choice of either losing their ISA allowance or settling for a much lower rate.

“If a small ISA season is on the horizon after all, it is likely to be a quick affair – savers might indeed blink and miss it. Savers will therefore have to stay alert and act fast if they see a deal that attracts their attention,” she said.

Nelson added that 26% of providers have either increased or launched a fixed ISA product this month, though the main banks have failed to get in on the action which means rates will be subdued.

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Autumn Statement: Everything you need to know at a glance

Yesterday Chancellor Jeremy Hunt made his first fiscal statement in the role, outlining a range of tax measure...

End of Help to Buy: 10 alternatives for first-time buyers

The deadline for Help to Buy Equity Loan applications passed on 31 October. If you’re a first-time buyer who...

Moving to an energy prepayment meter: Everything you need to know

As households struggle with the soaring cost of energy, tens of thousands of billpayers are expected to move o...

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

DIY investors: 10 common mistakes to avoid

For those without the help and experience of an adviser, here are 10 common DIY investor mistakes to avoid.

Mortgage down-valuations: Tips to avoid pulling out of a house sale

Down-valuations are on the rise. So, what does it mean for home buyers, and what can you do?

Five tips for surviving a bear market mauling

The S&P 500 has slipped into bear market territory and for UK investors, the FTSE 250 is also on the edge. Her...

Money Tips of the Week