New research has shown that UK savers are set to stash away £117 billion in Cash ISAs this year despite continued poor rates within the market. According to the research, 26% more of the UK population plan to use a Cash ISA this tax year.
However, the research from USwitch also highlights that 19 million UK adults have failed to take out a cash ISA, and in the process are missing out on a collective sum of £165 billion in tax-free savings.
Michael Ossei, personal finance expert at uSwitch.com, says: “Cash ISA rates have plummeted in recent months and savers are having to make do with the lowest returns in years. Yet despite this, savers will be flocking to cash ISAs in their droves with a 26% increase in the number of savers this year compared to last. And they will be saving more too – tucking away almost £1,000 more this year compared to the last. Whether they will find an attractive home for it remains to be seen – traditionally this is a time when competition in the cash ISA market hots up, but we are nearing the end of February and only a handful of providers have announced increased rates.
“While savers are up against it, it’s encouraging to see that more are willing to shop around and switch in order to get the best return. Last year we saw a big difference between the best fixed rate deals versus easy access deals, but not anymore. This year there is little difference between the two and with fixed rate deals offering little more than 2% interest, there is scant incentive or reward for locking cash up in this way.
“With rates just bumping along, it’s more important than ever for consumers to find the right ISA or savings plan to suit their needs. Arming yourself with the right information is the first step in winning the best return for your hard-earned cash.”