Isas on offer not keeping up with rate of inflation
19 August 2008
Almost 35 per cent of cash individual savings accounts (Isas) fail to beat inflation, according to a report.
Figures published in the Times from price comparison site Moneyfacts show that people who pay higher tax need to get a gross return of 8.33 per cent and lower rate payers 6.25 per cent to keep up with inflation.
The top rate on taxable savings accounts is currently 7.2 per cent so higher rate tax payers are forced to look at Isas, according to the Times.
According to Moneyfacts, 278 out of 1,980 of notice, no notice, fixed rate and normal savings accounts available have interest rates of more than 6.25 per cent on £10,000 balances.
Nearly half of the accounts which could offer rates higher than inflation come from building societies with a further quarter coming from high street banks such as Halifax.
According to the Times, Moneysupermarket says the two best Isa deals are from Market Harborough building society, which has a rate of 6.5 per cent, and Principality which offers savers 6.37 per cent.
Consumer Price Index Inflation in the UK is now 4.4 per cent, its highest level since April 1992.
