There are potentially thousands of people who have ISAs that are making miserable returns because their rates are lower than inflation, Abbey Savings has warned.
Abbey found that one in six immediate access ISAs are either equal to or less than RPI inflation (the most commonly used inflationary measure), which currently stands at 4.40%, including ISAs from high street providers.
Reza Attar-Zadeh, Head of Savings and Investments at Abbey, urges people to switch to a provider that will give them a higher return and make the most of their tax-free savings, because their current rates are eroding any potential tax benefits.
“We would urge those in sub-inflationary accounts to transfer to an ISA account paying at least above the rate of RPI,” Abbey’s Head of Savings and Investments said. “These sub-inflationary rates effectively negate any tax benefits in holding ISAs, since savers are losing money in real terms.”
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