ISA savings account holders are not earning as much interest as they could, according to new statistics.
Research from Moneyfacts found that ISA savers could be losing out on over £1,000 each year because their money is not in the best-paying accounts. The research found that many banks are lowering rates on existing ISA accounts and refusing to allow current ISA-holders to transfer their money to better-paying deals offered to new customers.
Moneyfacts’ research found that the average cash ISA return is 1.71 per cent, but many only pay 0.1 per cent. At the other end of the scale there are ISA savings accounts which offer much better deals, such as Northern Rock’s five-year fixed-rate ISA, which offers a rate of 4.3 per cent.
Michelle Slade of Moneyfacts advised savers to check the best rates for new ISAs and also to make sure they were still getting the best deal on existing savings accounts. Those who have invested the maximum amount into an ISA each year could now have savings of up to £50,000 before interest. Slade added that for this group, the rate differences between ISA accounts could make a big difference – up to £1,300 a year.
