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Compare ISA deals as new allowance is launched

07 October 2009 / by Andy Davies

The eagerly awaited ISA allowance has been launched this week, allowing over 50 savers to shelter more of their savings from the taxman, but according to uSwitch.com, some providers have now cut their rates.

It appears Lloyds TSB has made the biggest cut, reducing the rate of its one year fixed rate ISA from three per cent to two per cent, while RBS have reduced its rates on a number of accounts by up to 0.25 per cent.

Norwich & Peterborough Building Society has also made cuts to its one year mini cash ISA, reducing the rate by 0.20 per cent, to 2.60 per cent.

Commenting on the decision taken by these providers to cut rates, Rumina Hassam, savings expert at uSwitch.com, said: "With 21 million over 50s eagerly awaiting the ISA limit increase it's really disappointing to see providers have cut their rates in the recent weeks, despite the static base rate."

Over 50s who take full advantage of the new ISA limit can now invest up to £10,200 in a stocks and shares ISA, while £5,100 can be put into a cash ISA.

According to uSwitch.com, an over 50 saver making full use of the new allowance on a cash ISA could earn up to £110 in interest in one year based upon an account paying four per cent in interest, compared to around £78 based upon the old limit.

However, Rumina Hassam is predicting more 'rate trimming' may occur in the coming months as a result of the new ISA allowance.

"For many providers, this is money they simply do not want to part with. In fact, by taking advantage of the new full allowance, the over 50s could save up to £105,000 each by the time they hit retirement with interest totalling almost £28,000. This could provide a reasonable lump sum towards a decent pension income without the added risk of the stock market."  

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 Product NameISA OptionIncome YieldMore Info
', eventAction: 'Account', eventLabel: 'Schroders Monthly High Income' });">Schroders Monthly High Income Fundyes
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The Schroder Monthly High Income Fund aims to generate a high income, whilst not compromising capital, by investing in a diversified basket of fixed income securities. 100% Discount off Initial Charges.
', eventAction: 'Account', eventLabel: 'Invesco Perpetual Monthly Income Plus' });">Invesco Perpetual Monthly Income Plus Fund ISAyes
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', eventAction: 'Apply Now', eventLabel: 'Invesco Perpetual Monthly Income Plus' });">More Info >
Popular monthly income fund that aims to achieve a high level of income whilst seeking to maximise total return through investing in high yielding corporate and Government bonds, together with UK equities. 100% discount on initial charges.
', eventAction: 'Account', eventLabel: 'Henderson Strategic Bond Fund' });">Henderson Strategic Bond Fundyes
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', eventAction: 'Apply Now', eventLabel: 'Henderson Strategic Bond Fund' });">More Info >
The aim of this fund is to deliver a quarterly income to investors by investing in higher yielding assets, which will include most types of fixed interest securities such as high yield bonds, investment grade bonds and government gilts, as well as having the ability to invest a proportion of the fund in equities. Income is paid to you quarterly.
', eventAction: 'Account', eventLabel: 'Schroders Income Maximiser' });">Schroders Income Maximiseryes
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', eventAction: 'Apply Now', eventLabel: 'Schroders Income Maximiser' });">More Info >
The Schroder Income Maximiser Fund ISA aims to deliver a target income yield of 7% pa, also providing potential capital growth. Income is paid to you quarterly. 100% Discount off Initial Charges.
', eventAction: 'Account', eventLabel: 'Invesco Perpetual Corporate Bond' });">Invesco Perpetual Corporate Bond ISAyes
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This highly popular fund aims to achieve a high level of overall return with relative security to capital. Income Paid to you twice yearly. Up to 100% Discount off the Standard Initial Fund Charge.
', eventAction: 'Account', eventLabel: 'Artemis Income ISA' });">Artemis Income ISAyes
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', eventAction: 'Apply Now', eventLabel: 'Artemis Income ISA' });">More Info >
One of the leading UK Equity Income Funds. The Fund managers hunt out companies with strong free cash flow and solid balance sheets. Income is paid to you twice yearly. 100% Discount off the Standard Initial Fund Charge.
', eventAction: 'Account', eventLabel: 'Jupiter Corporate Bond' });">Jupiter Corporate Bond Fund ISAyes
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', eventAction: 'Apply Now', eventLabel: 'Jupiter Corporate Bond' });">More Info >
The Jupiter Corporate Bond aims to achieve a high level of income with the opportunity for capital growth, through mainly investing in fixed interest securities. Income is paid to you twice yearly. 87.5% Discount off the Standard Initial Fund Charge.
', eventAction: 'Account', eventLabel: 'invesco perpetual high income' });">Invesco Perpetual High Income Fund ISAyes
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One of the UK's most popular income fund ISAs the Invesco Perpetual High Income has delivered consistently good long term returns through a variety of market conditions. Income is paid to you twice yearly. Up to a 100% Discount off the Standard Initial Fund Charge.
', eventAction: 'Account', eventLabel: 'MandG Corporate Bond' });">M&G Corporate Bond ISAyes
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The M&G Corporate Bond Fund is a conservative ‘blue chip’ sterling fund that aims to produce a higher return than UK government bonds. Income is Paid to you Quarterly. 100% Discount off the Standard Initial Fund Charge.
', eventAction: 'Account', eventLabel: 'Jupiter Merlin Income' });">Jupiter Merlin Income Portfolioyes
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', eventAction: 'Apply Now', eventLabel: 'Jupiter Merlin Income' });">More Info >
The Jupiter Merlin Income Portfolio fund aims to achieve a high and rising income with some potential for capital growth. Income Distributions are made to you quarterly. 95% Discount off the Standard Initial Fund Charge.
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†† Income payments are dependent upon the FTSE 100 Index.

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