Long-term savers should ditch high street banks and invest in Innovative Finance ISAs (IFISAs) which offer greater returns, EasyMoney has claimed.
The property-backed peer-to-peer lender, which offers an IFISA, said that high street banks offer low interest rates to tempt new clients whilst not offering the same deals to long-term clients, and then these rates are often cut to near zero after a year.
With inflation at 1.4 per cent in December according to the Consumer Price Index, savers holding significant amounts of cash in low or no interest accounts are seeing the value of their assets eroded all the time.
The total amount of money earning no interest grew from £163bn in 2018 to a staggering £173bn in 2019, a nine-fold increase from £18.5bn in 2009 when the near-zero rates era began.
Read more: Who wants to be an IFISA millionaire?
“Savers should consider a different way of growing their money,” EasyMoney said in a blog post.
“One way of doing this is with our IFISA, which offers a range of target rates depending on how much you invest, all of which are backed by UK property.
“Investing does however put your capital is at risk and IFISAs have a different risk profile to traditional cash ISAs.
“To help safeguard against not being covered by the Financial Services Compensation Scheme EasyMoney employs a manual credit committee with stringent lending criteria that ensures all loans are secured by a legal charge over UK property at a maximum 75 per cent loan-to-value to help protect your money.”