Savers across the UK who have poured billions into their Cash ISA accounts are missing out on the top rates of interest, according to the latest research.
And worse still, they are being shunned if they try to shift their existing ISAs to accounts which are offering better rates.
The subsequent result of this situation is that many of the banks offer little alternative to the poor rates being offered on both their easy-access and short-term fixed-rate deals.
Many people will look to switch their money to an account that offers more when their fixed-rate deal has come to an end, but this is virtually impossible for the majority.
The research from analysts SavingChampion.co.uk shows that only one of its top-ten variable rate deals is available for all savers – not good news for those looking to switch.
Some providers have banned transfers altogether, while others only allow existing savers or those living locally to open accounts – ultimately making the process of switching incredibly difficult.
Limited options in the UK
It doesn’t get any easier for those considering the one bank they could use – Punjab National – as there are only seven (SEVEN!) in the whole of Britain.
“Picking the best deal depends on where you live, the size of your balance and whether you are an existing customer,” said Anna Nowes, director at Savingchampion.
Cash ISAs are increasingly popular with savers, with £226 billion currently in these tax-free accounts – 6.6% up on the same time last year.
However, the average rate that savers can expect to see has plummeted during the last year with rates down by between 30% and 40% on average, according to the Bank of England.
This piles more misery on to customers who are already struggling, with rising energy and fuel bills as well as the rising cost of living generally.
Useful advice
The best advice for those coming to the end of fixed-rate deals or those looking for a change is to approach a local building society and see what they offer.
Alternatively, switching funds to a prepaid card account could enable easy money management and a cut back in spending, meaning money can be stretched further.
In addition, the accounts offer a great deal of security and can be used to cover costs from bills to everyday spending.
If saving is no longer a viable option due to the below-inflation rates being offered, then having a means of controlling spending could be the way forward.
