Abbey Savings warns on miserly ISAs

Abbey Savings warns that thousands of people may be stuck in ISAs at rates less than inflation, which was confirmed today as 4.40 per cent.

One in six immediate access ISA accounts today currently run at a rate below RPI, the most commonly used inflationary measure. This includes ISAs offered by high street brands.

Reza Attar-Zadeh, Head of Savings and Investments at Abbey, said: “We would urge those in sub-inflationary accounts to transfer to an ISA account paying at least above the rate of RPI.

“These sub-inflationary rates effectively negate any tax benefits in holding ISAs, since savers are losing money in real terms.

“There are, of course, rates available which are much higher than RPI. Abbey’s Direct ISA, for example, currently offers rates up to 6.00 per cent, while our Super ISA – available when you invest the same amount into an Abbey Guaranteed Growth Plan – offers 8.10 per cent.”

All of Abbey’s ISAs allow transfers of existing ISA balances. The average transfer balance of ISAs is £12,000.