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Halifax illustrates Cash ISA Savings Catastrophe, Which Best ISA Now?

Personal_Finance / ISA's Nov 20, 2012 - 02:20 AM GMT

By: Nadeem_Walayat

Personal_Finance

Best Financial Markets Analysis ArticleBritain's savers continue to fight a losing battle to maintain purchasing power of savings following the financial crash of four years ago since which time savings interest rates have tended to languish below even the official highly suspect CPI inflation rate, that never reflects the rising cost of peoples weekly shops. Britain's whole savings market reeks of being a fraudulent enterprise that exists purely to transfer wealth from savers over to the banks and government (taxes). In which respect cash ISA's offered some hope to at least avoid the tax element of the stealth theft underway.


This year Cash ISA savers will have seen interest rates peak during May 2012 at rates nudging above 3% for instant access accounts and as high as 4.5% for Fixed rate ISA's, however since which time they have continued to tumble as illustrated by looking at how the cash ISA rates at the tax payer bailed out bank, the Halifax have trended this year which is typical of what is taking place right across Britain's Cash ISA 'artificial' savings market.

Halifax ISA's May 2012 Sept 2012 Nov 2012 % Cut
Instant Access
3%
2.75%
2.35%
-22%
1 Year Fix
2.25%
2.05%
-9%
2 Year Fix
4.00%
3.25%
2.25%
-43%
3 Year Fix
4.25%
3.75%
2.35%
-45%
4 Year Fix
4.35%
3.80%
2.40%
-45%
5 Year Fix
4.50%
4.15%
2.60%
-42%

 

The above table illustrates what is in effect a crash in ISA savings rates during the past 6 months of approaching 50% of where the rates stood in May 2012.

Why have Savings Interest Rates Crashed?

For the answer we need to look to the Bank of England, as our banking sector crime syndicate continues to suckle on the teat of their mother Bankster of England to tune of at least £450 billion since September 2008, the consequences for which is an artificial savings market where if the Banks need money they can go and suckle on the Bank of England for some more cheap money. Why should they borrow form savers at say 4% for a decent inflation beating fixed rate when they can get it from the Bank of England for under 1%!

The bankster's are continuously having every orifice stuffed with tax payer cash to the tune of about £120 billion a year the impact of which is potentially leveraged up ten fold to go and and inflate asset prices such as government bonds which the Bank of England buys back from them thus giving them an instant profit as part of its policy of monetizing government debt. Therefore Britains banks have no incentive to offer decent rates of interest to savers because they make risk free profits by borrowing from and lending to the Government!

Off course this is part of the governments now five year old strategy, because it actually began at least in April 2008 as I wrote at the time (21 Apr 2008 - Bank of England Throws £50 billion of Tax Payers Money at the Banks), where the price paid for printing money has to be borne by someone and that someone are savers and workers who have seen the inflation fraud whittle away the purchasing power of savings and earnings, where the fraud is further enhanced by taxes, for it is not enough that wealth and purchasing power is being stolen annually at an average official inflation rate of about 3.4% but that interest received is further taxed at 20% for most savers and 40%+ for the more successful of Britians' workers, as a further slap in the face for working hard rather then choosing to waste ones life on benefits as the a large part of the last Labour governments vote buying frenzy inducing benefit culture housing estates across Britain tend to do.

The Exponential Inflation Mega-trend

Whilst the mainstream press and academics focus WHOLLY on the annual CPI Inflation graph as illustrated below that give the illusion of monetary stability, the reality is that of an exponential inflation mega-trend as illustrated by the second graph below graph that shows that despite the British economy having been in economic depression for the past 4 years, yet it has still suffered official CPI Inflation of 15%.

UK CPI Inflation Index

The inflation mega-trend is something that the mainstream press never mentions as the journalists who think they are economists rely on vested interest academic economists to pump out propaganda that virtually wholly focuses on what amounts to just the annual momentum in the rate of change of inflation that paints a picture of relative stability when the truth is that of an exponential inflation trend that over time virtually guarantees that value of wealth such as savings will effectively be stolen by governments towards the purpose for the buying of votes to win elections. This demands action be taken to protect oneself from this theft of purchasing power, strategies that I have covered at length over the years and in-depth in the Inflation Mega-trend ebook (FREE DOWNLOAD)

Ensure you are subscribed to my always free newsletter for in-depth analysis and specific forecasts on how protect and profit from the ongoing consequences of the debt and money printing induced Inflation Mega-trend. Because as I stated right at the very start, once money printing starts it does not end whilst deficits exist and there is no sign whatsoever that Britain's budget deficit is about to disappear at any point during THIS decade!

Best Cash ISA

At about this stage I would normally list a table of the best cash ISA rates currently available for savers to attempt to at least avoid the tax theft on savings i.e. double taxation, both when you earn the money and when you try to alleviate inflation theft. However the Banks cannot miss an opportunity to rip of their customers as many also continue the policy of offering LOWER interests for the SAME accounts that just have the ISA label attached to them.

Therefore the cash ISA savings rates are just so bad that none of the crime syndicate that masquerades as our banks deserves mentioning, instead probably the best strategy is to wait until early next year as the best rates tend to materialise during March and April of each year i.e. to coincide with end of tax years and start of the following years, therefore it maybe better to either wait or opt for an instant access ISA now, in which respect the rates are still catastrophically poor so again not worth mentioning.

To be in receipt of ongoing strategies on how to protect your wealth from ongoing Inflation theft, ensure you remain subscribed to my always FREE newsletter.

Source and Comments: http://www.marketoracle.co.uk/Article37634.html

By Nadeem Walayat

http://www.marketoracle.co.uk

Copyright © 2005-2012 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 three ebook's - The Inflation Mega-Trend; The Interest Rate Mega-Trend and The Stocks Stealth Bull Market Update 2011 that can be downloaded for Free.

Stocks Stealth Bull Market Ebook DownloadThe Interest Rate Mega-Trend Ebook DownloadThe Inflation Mega-Trend Ebook Download

Nadeem is the Editor of The Market Oracle, a FREE Daily Financial Markets Analysis & Forecasting online publication that presents in-depth analysis from over 600 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.

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