Savers facing ‘daylight robbery’ with cash ISA rates
SAVERS relying on cash ISAs are facing a “dismal and depressing” 1.03 per cent return on average, Money&Co has warned.
The peer-to-peer business lending platform surveyed 233 ISA cash accounts available to UK savers and found all fail to beat inflation.
The highest interest rate – from Charter Savings Bank – was 2.11 per cent, but requires savers to lock up their money on a five-year fixed rate.
In comparison, Money&Co says, P2P lenders are offering rates of seven per cent and more this ISA season through their Innovative Finance ISAs (IFISA).
Nicola Horlick, chief executive of Money&Co, predicted this ISA season will see the mass migration of the £270bn held in cash ISAs to the far higher yields and greater risk of IFISAs.
“These figures lead us to conclude that the options facing cash ISA investors are probably best described as the three Ds: dismal, depressing, or daylight robbery,” she said.
“If you take out the smaller building societies and just look at what the major banks are offering, it is a pitiful 0.5 per cent.”
Money&Co, founded by City superwoman Horlick, launched its IFISA in March 2017 and offers a three-year fixed rate IFISA based on A+ rated loans secured on residential property, offering a rate of around seven per cent after fees.
Read more: IFISAs, the long road