26 Apr 2024

23% fall in ISA choice, a third less money

Moneyfacts research reveals a 23% fall in the choice of where to place your cash ISA this year compared to April 2012.

Not only have product numbers fallen but the rates last year were around a third higher than today, (one-year fixed has fallen by 32%/long-term fixed by 33%).

Since the start of 2013, the number of ISAs available has not noticeably increased despite the build-up to the biggest savings extravaganza in the calendar. At the same time, average interest rates paid on no-notice, notice and fixed rate cash ISAs have fallen across the board.

NUMBER OF CASH ISAS
	2012	2013
Jan	268	316
Feb	286	310
Mar	403	334
Apr	420	325
Source: Moneyfacts.co.uk

CASH ISAS - AVERAGE RATES
	2012	2013	2012	2013	2012	2013	2012	2013
	No Notice		Notice		1 Year Fixed		Long-Term Fixed
Jan	1.78	1.62	2.03	1.90	2.91	2.23	3.47	2.44
Feb	1.79	1.57	2.04	1.86	2.93	2.03	3.51	2.25
Mar	1.84	1.56	2.1	1.79	2.95	2.02	3.51	2.31
Apr	1.88	1.54	2.05	1.76	3.03	2.05	3.58	2.41
Source: Moneyfacts.co.uk

Sylvia Waycot, Editor at Moneyfacts.co.uk, said:

“Up until recently, ISA season was a sure bet. There would be a glut of new products, a mini interest rate war and an enormous amount of marketing bestowing the virtues of putting your money into an ISA, but not this year.

“As a knock-on effect to the Government’s Funding for Lending Scheme, providers simply don’t need savers money in order to lend, and lengthening the project is only going to lengthen savers’ pain.

“Savers may be forgiven for wondering “what is the point?”, but it is important, if you have the means, that you do use up all of your ISA allowance each year. If you don’t and suddenly things get better, you won’t be able to reclaim any unused allowance from missed years.

“If Funding for Lending grows, then the unpalatable truth is that savings rates will also stay low and savers will need to combat this by being vigilant for not only the best rates, but ensuring they get the best from the account by understanding the many conditions that can apply.”

Moneyfacts Group

Moneyfacts is the UK’s leading independent provider of personal financial information and our data is used and trusted throughout the financial industry.

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