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New £15,000 Cash ISA Interest Rates Ahead of 1st July - What to Do?

Personal_Finance / ISA's Jun 26, 2014 - 02:47 AM GMT

By: Nadeem_Walayat

Personal_Finance

Many savers will have delayed opening a cash ISA for the current tax year so as to best capitalise on the the new cash ISA allowance of near triple the existing amount of £5,490 to £15,000. However, It should not come as a much of a surprise that after more than 5 years of an artificial highly manipulated UK interest rates market for the primary purpose for funneling tax payer cash into the bankrupt banks (QE) that the already extremely low savings rates have have yet again been cut ahead of new ISA's going live on 1st of July.


Sylvia Waycot, Editor at Moneyfacts.co.uk, said: “All hopes were pinned on July being the month our savings might start to offer a worthwhile return, but even the new £15,000 ISA limit has not sparked any interest from providers - literally.

“Shockingly, the average rate on variable and one-year fixed ISAs has fallen since the Chancellor’s announcement in April whereas the non-ISA equivalents have had no such downward movement and non-ISA notice accounts have even risen.

“Only the five-year fixed ISA shows a positive story with the average rate increasing by 0.08% - but with a BoE rate rise imminent it would be an odd time to lock money in a long term fixed account.

“It seems that rather than a subdued ISA market we have a reluctant ISA market, but by providers rather than consumers.

“Whilst this can’t be anything but disappointing for ISA savers, do remember to use as much of the entitlement as you can and if you are worried about getting locked into a long-term fixed rate, keep your savings more liquid in a shorter term - the important thing is it must always be within an ISA wrapper.”

So whilst in one act the Coalition government sought to correct a huge disparity in the ISA market of savers being forced to split their annual ISA allowances between Cash and Shares ISA's by allowing savers to use the whole of their annual allowance towards a cash ISA rather than the existing 50/50 split between cash and shares, and then to boost the cash ISA allowance to £15,000, which compares against the existing cash ISA allowance of just £5,940.

Against this the banking crime syndicate continues to suckle on the teat of the Bank of England through a myriad of schemes that results in effectively providing the banks with unlimited funding that has resulted in the collapse of savings interest rates that began in May 2012 and has been kept at sub inflation rates of systemic theft.

The table below illustrates the cash ISA rates offered by apparently the often reported on as best buy accounts of the Halifax mega-bank that in reality crashed in response to the Bank of England's Funding for Lending Scheme that started in July 2012.

Halifax ISA's May 2012 Sept 2012 Nov 2012 Mar 2013 May 2013 July 2013 Mar 2014 June 2014 % Cut
Instant Access
3%
2.75%
2.35%
1.75%
1.35% 1.35% 1.5% 1.30% -56%
1 Year Fix
2.25%
2.05%
2.05%
1.75% 1.75% 1.65% 1.5% -33%
2 Year Fix
4.00%
3.25%
2.25%
2.5%
2.10% 2.10% 2.05% 1.8% -55%
3 Year Fix
4.25%
3.75%
2.35%
3.00%
2.25% 2.25% 2.25% 2% -53%
4 Year Fix
4.35%
3.80%
2.40%
3.05%
2.30% 2.30% 2.40% 2.10% -52%
5 Year Fix
4.50%
4.15%
2.60%
3.10%
2.35% 2.35% 2.5% 2.20% -51%

The table shows that the tax payer bailed out Halifax continues to across the board pay abysmally poor rates of interest that are far below the official UK RPI Inflation rate of 2.4%.

What to do ?

In my opinion savers either continue to effectively hand over their hard earned cash to the banks to systematically siphon off through persistent loss of purchasing power or they look at alternative asset classes such as the UK housing market that is currently trundling along at an average annual percentage rate of FIVE times the pittance that the likes of Halifax pays as covered at length in my New UK Housing Market Ebook available for FREE DOWNLOAD (Only requirement is a valid email address).

New Housing Market Ebook - FREE DOWNLOAD

The housing market ebook of over 300 pages comprises four main parts :

1. U.S. Housing Market Analysis and Trend Forecast 2013-2016 - 27 pages

The US housing market analysis and concluding trend forecast at the start of 2013 acted as a good lead exercise for the subsequent more in-depth analysis of the UK housing market.

2. U.K. Housing Market Analysis and House Prices Forecast 2014-2018 - 107 pages

The second part comprises the bulk of analysis that concludes in several detailed trend forecasts including that for UK house prices from 2014 to 2018 and their implications for the outcome of the next General Election (May 2015) as well as the Scottish Referendum.

3. Housing Market Guides - 138 Pages

Over 1/3rd of the ebook comprises of extensive guides that cover virtually every aspect of the process of buying, selling and owning properties, including many value increasing home improvements continuing on in how to save on running and repair costs with timely maintenance tasks and even guides on which value losing home improvements should be avoided.

  • What Can You Afford to Buy?
  • Home Buyers Guide
  • Home Sellers Guide
  • Top 15 Value Increasing Home Improvements
  • Home Improvements to Avoid
  • Home Winter Weather Proofing 22 Point Survey

These guides will further be supplemented from Mid 2014 onwards by a series of online videos and regularly updated calculators such as the Home Buying Profit and Loss Calculator, which will seek to give calculations on whether to buy or rent based on personal individual circumstances, that will be updated to include the latest expected trend trajectories for future house price inflation i.e. you will have your own personal house price forecast.

4. Historic Analysis 2007 to 2012 - 40 pages

A selection of 10 historic articles of analysis to illustrate the process of analysis during key stages of the housing markets trend from the euphoric bubble high, to a state of denial as house prices entered a literal free fall, to the depths of depression and then emergence of the embryonic bull market during 2012 that gave birth to the bull market proper of 2013.

FREE DOWNLOAD (Only requirement is a valid email address)

Source and comments:http://www.marketoracle.co.uk/Article46202.html

By Nadeem Walayat

http://www.marketoracle.co.uk

Copyright © 2005-2014 Marketoracle.co.uk (Market Oracle Ltd). All rights reserved.

Nadeem Walayat has over 25 years experience of trading derivatives, portfolio management and analysing the financial markets, including one of few who both anticipated and Beat the 1987 Crash. Nadeem's forward looking analysis focuses on UK inflation, economy, interest rates and housing market. He is the author of five ebook's in the The Inflation Mega-Trend and Stocks Stealth Bull Market series that can be downloaded for Free.

Housing Markets Forecast 2014-2018The Stocks Stealth Bull Market 2013 and Beyond EbookThe Stocks Stealth Bull Market Update 2011 EbookThe Interest Rate Mega-Trend EbookThe Inflation Mega-trend Ebook

Nadeem is the Editor of The Market Oracle, a FREE Daily Financial Markets Analysis & Forecasting online publication that presents in-depth analysis from over 1000 experienced analysts on a range of views of the probable direction of the financial markets, thus enabling our readers to arrive at an informed opinion on future market direction. http://www.marketoracle.co.uk

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any trading losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors before engaging in any trading activities.

Nadeem Walayat Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


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