Interactive Investor

Savers have the worst choice of deals on record

19th April 2021 15:24

Marc Shoffman from interactive investor

Latest research shows all-time lows for number of deals and average interest rates.

Savers are stuck with the lowest choice of savings deals ever, according to analysis by financial experts Moneyfacts.

There were 1,404 savings deals available in April 2019, Moneyfacts says, but the choice has dropped to 1,039 this month – down 25.9% annually.

This is a particular blow at a time when savers would hope to see a boom in ISAs on offer at the start of the tax year, for ‘ISA season’.

There were 420 cash ISA options in April 2019 and there are now just 301 – a 28.3% decline.

All average savings rates also stand at record lows, according to Moneyfacts.

The average easy access savings rate is now 0.16%, compared with 0.64% last year.

The average rate for an easy access cash ISA is 0.22%, down fro 0.98% in April 2019.

The number of savings deals paying more than the Bank of England base rate of 0.1% fell for the sixth consecutive month to 1,044 deals, its lowest level since February 2009.

Rachel Springall, finance expert at Moneyfacts, says: “As the choice of cash ISAs fell to their lowest levels in over four years and rates stand at record lows, it would not be too surprising to see savers re-evaluate their attitude to risk and seek alternative ways to invest, such as with a stocks and shares ISA.”

The findings are echoed by financial website Savings Champion.

Its founder Anna Bowes describes the cash ISA season so far as a “damp squib”.

She says: “As well as finding a tax-free home for this year’s allowance now rather than waiting until the end of the tax year and missing a year’s worth of tax-free interest, are your old ISAs providing the best they can?”

Savers’ cash pots faced severe erosion in February, despite the gap closing between inflation and interest paid on the average easy-access account.

Inflation was 0.4% in February, according to the latest figures from the Office for National Statistics (ONS), down from 0.7% in January.

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