No Cash ISA Season 2017Personal_Finance / ISA's Mar 20, 2017 - 12:24 PM GMT
Moneyfacts UK Savings Trends Treasury Report data, yet to be published, highlights that the number of ISA products has risen to 311, marking the first time the number of ISAs has stood above 300 since September 2016. The long-term ISA rate has also risen, for the fourth consecutive month.
Charlotte Nelson, Finance Expert at Moneyfacts, said:
“Since the Funding for Lending Scheme (FLS) came into effect four years ago, ISA season has been virtually non-existent, with rates sliding across the ISA market. However, with this month’s positive news, the ISA market is once again showing small signs of life, raising hopes that this year we may once again see providers compete for ISA business.
“With 26% of providers either increasing or launching fixed ISA products this month, the signs of an upturn are good. However, yet again the main banks have failed to get in on the action, which means rates will still be subdued despite the best efforts of others.
“After the Personal Savings Allowance (PSA) was introduced in April last year, ISA rates took a severe tumble, with the long-term ISA rate falling by 0.08% in just one month. Savers and providers were unsure as to whether ISAs were defunct. However, the appetite for ISAs remains strong, driven by the awareness that if a saver does not use their ISA allowance, they will lose it.
“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.”
The Moneyfacts UK Savings Trends Treasury Report, out later this month, is a comprehensive monthly overview of current and historical data for the savings and investment market, incorporating written commentary alongside graphs and tables highlighting key trends.
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