Shock chart reveals savers face 'dual onslaught' of misery wiping billions off cash pots

Britons trying to make an income from savings face cash ISAs with an average rate of 0.41 per cent, less than a fifth of inflation at 2.3 per cent, according to evestor.co.uk.

It means households with the tax-free accounts are effectively receiving negative interest rates, which have sliced £4.4billion off savings.

Anthony Morrow, chief executive of evestor.co.uk, said: “Savers and investors in the UK are facing a dual onslaught from low interest rates and high fees.

“Even those locking their money away in time deposits now get back less than one percent interest on their hard-won cash.

“That means collectively, UK households with cash ISAs have lost £4.4 billion to inflation just in the last twelve months.”

In the current environment, savers have been urged to only keep access to emergency income in cash.

Other money is best directed towards paying down debts or investments, depending on risk appetite.

Mr Morrow said: “Holding cash is a sensible and vital part of any financial plan.

“We should all aim to have a few months’ worth of outgoings to hand in case of financial surprises.

“First hold the cash you need to hold – and not too much more.”

He added: “If there is a silver lining from such low rates, it’s the support it gives some people in paying down debts. That should always come first.

“Even with other rates at record lows, many find themselves paying interest on a credit card at an average rate of 22 per cent.

“If that’s the case then saving or investing isn’t the priority. For anyone with serious debts, lower rates for longer are better news – but a boost that is unlikely to last forever.”

Daily Express :: Personal Finance Feed


Show Buttons
Hide Buttons