Recent reports on ISA’s and savings accounts are highlighting that the interest rates currently available on Cash ISA’s are producing the worst ever returns for investors.
Some ISA’s are rewarding customers with as little as 0.01%, so an investment of £1000 would bring you 1p back per year……
Clearly this is a huge drop from the 3.15% returns offered five years ago, and the low rates are being blamed on the current low interest rate environment as well as the introduction of the new personal savings allowance in April. Historically, banks would remove 20% of your interest earned from savings and hand it over directly to the taxman. From April, you will now keep all the interest earned on your savings, in addition to £1000 in interest allowance for lower rate tax payers and £500 for higher rate payers. Is there any point in continuing with a cash ISA?
Based on the best easy access ISA rate of 1.41% you would need savings of over £70,900 to start benefiting from tax free interest. Surely there must be a better option for hard working savers?
The FCA is starting to name and shame organisations who provide such low returns in the hope that it will encourage consumers to shop around. ISA’s are no longer the ‘go-to’ product for savers and consumers are being encouraged to look at the option of stocks and shares ISA’s which is likely to provide you with better returns over longer periods of time.
An Independent Financial Advisor can advise on the best options for your savings and will have access to the whole of the market. For more information on stocks and shares ISA’s or to speak to one of our Independent Financial Advisors please contact 01273 208813 or email [email protected].
This article was originally published on Monday, March 14, 2016 – 15:46
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