Savers ‘suffer from shrinking Isa rates over past six months’


Savers have seen average Isa rates shrinking over the past six months, according to analysis.

The average “no-notice” Isa rate on the market was 0.98% in April, but now it has fallen to 0.93%, according to

Over the same period, the average one-year fixed-rate Isa rate on the market has reduced from 1.34% to 1.24%.

The average five-year fixed-rate Isa rate has fallen from 1.92% to 1.74%, and average two-year fixed-rate deals have dropped from 1.45% to 1.26%.

Traditionally, Isa rates see some improvement around the start of each new tax year in April as providers compete to attract new business.

But the introduction of the personal savings allowance (PSA) in 2016 means people can earn up to £1,000 of interest tax-free in non-Isa accounts.

Rachel Springall, finance expert at, said: “During the six-month period between April and October, rates have tumbled, clearly showing that Isa season lustre was short-lived.

“As it stands, the biggest impact has hit the longer-term offers, where the average two-year and five-year fixed Isa rates have fallen by 0.19 percentage points and 0.18 percentage points respectively since the start of April.”

Ms Springall continued: “Savers can usually get better returns outside of an Isa wrapper, particularly if they fix; however, consumers may wish to utilise their allowance as the PSA is not guaranteed to stay around forever.

“Indeed, the average five-year fixed Isa pays 1.74% today, but the average five-year fixed bond pays 1.90%.”

Giving tips for savers comparing easy access Isas, Ms Springall said: “It’s vital they are aware of the terms and conditions as some of the top deals apply withdrawal restrictions and are not so easy-access as they may seem.”