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A brand new year, but the same-old savings rates

Personal_Finance / Savings Accounts Jan 11, 2016 - 12:39 PM GMT

By: MoneyFacts

Personal_Finance

The start of the New Year has prompted many to resolve to put more aside more money for a rainy day. However, while savers’ intentions are in the right place, Moneyfacts.co.uk’s research shows that few may be encouraged to follow through thanks to less than enticing savings rates.

In fact, the average easy access ISA rate has fallen by 0.19% from two years ago to stand at 1.06% yearly, the lowest level Moneyfacts.co.uk has ever recorded.


Charlotte Nelson, Finance Expert at Moneyfacts.co.uk, said:        

“A brand new year does not necessarily mean a fresh start in the savings market. Indeed, savings rates today have hit another record low and make disappointing news for the start of 2016.

“Savers wanting to start building a nest egg will look towards highly flexible easy access savings accounts and ISAs, but anyone looking at the rates available today will perhaps question the benefit of saving at all.

“For example, back in 2013 the top paying easy access ISA paid 2.75% yearly, but the best rate today is only 1.50% - a significant 1.25% less. Standard easy access savings accounts don’t fair any better, either, with the top rate falling by 0.68% from 2013 to just 1.65% today.

“For a long time ISAs have been the go-to product for not only some of the best rates but also for the tax shelter they provide. However, with the new tax rules for all savings accounts coming into play in April, ISAs are likely to lose some of their attraction, meaning low rates are likely to become more, not less, prevalent.

“With such a glum outlook, savers are pinning their hopes on a base rate rise this year, but as money from the Funding for Lending Scheme still needs to be spent, the potential boost to savings rates by a rise in base rate could be weak to non-existent.”

www.moneyfacts.co.uk - The Money Search Engine

Moneyfacts.co.uk is the UK's leading independent provider of personal finance information. For the last 20 years, Moneyfacts' information has been the key driver behind many personal finance decisions, from the Treasury to the high street.


© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


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