Map reveals the UK’s laziest ISA savers who are missing out on £105 a year in interest

A MAP has revealed the UK’s laziest ISA savers who are forfeiting up to £105 extra a year in interest.

Data shows that Londoners are the laziest savers with average rates for easy-access ISAs at just 2.69%, barely exceeding December’s 2.5% inflation. 

Individual savings accounts (ISAs) offer tax-free savings on up to £20,000 a year.

You do not pay tax on any money within an ISA, regardless of how much interest you earn.

There are different types of ISAs, such as fixed or variable and each have different uses and merits.

However, millions of Brits with savings sitting in measly easy-access accounts are missing out on higher returns, according to analysis by Shawbrook Bank.

This means their savings are effectively stagnating or even losing value in real terms.

With higher-paying ISAs offering interest rates above 4%, savers could be missing out on over £100 in interest annually.

As an example, someone with £8,000 in a typical London-based easy-access ISA could gain an additional £105 per year by switching from an ISA paying 2.69% to 4%.

This trend isn’t limited to London.

Savers in the North East receive an average rate of 2.72%, losing around £102 yearly, while those in the East of England and Scotland get 2.78%, missing out on £98.

Even in regions with slightly better rates, like Yorkshire and the Humber (2.99%), savers still forfeit £81 annually compared to the benchmark 4%.

Paul Went, managing director of savings at Shawbrook, said: “Inflation is still stubbornly high and leaving cash in low-paying accounts could mean the real value flatlines or declines over time.

“With the new tax year around the corner, opening a higher-paying account could mean above-inflation returns.

“However, time is running out.

“The market and economists predict cuts to the Bank of England’s interest rate and if this happens, it could have an impact on the savings rates offered.”

Economists are predicting that the Bank of England will introduce four base rate cuts by the end of 2025.

This would lower the base rate to around 3.75%.

However, as of today, several providers continue to offer cash ISAs with interest rates above 4%, including fixed-rate options for one, two, three, and five years.

So, it’s important to shop around to ensure their money is working as effectively as possible.

TOP CASH ISA RATES

If you’re looking for a tax-free savings account without withdrawal limitations, then you’ll want to opt for an easy access cash ISA.

These do what they say on the tin and usually allow for unlimited cash withdrawals.

The best easy-access cash ISA available is from Trading212, which pays 5.12% – and you only need to pay a minimum of £1 to set it up.

This means that if you were to save £1,000 in this account, you would earn £51.20 a year in interest.

Alternatively, Moneybox’s easy access ISA offers customers 5.11% back on savings worth £1 or more.

If you’re looking to grow your savings and don’t need regular access to your funds, a fixed-term cash ISA or a regular savings account could be a better option.

The best fixed rate currently offered is Kent Reliance’s one-year fixed rate cash ISA, which pays 4.52%, requiring a minimum investment of £1,000.

Secure Trust Bank one-year fixed rate ISA also offers 4.52% back with a minimum investment of £1,000.

This means that if you were to save £1,000 in this account, you would earn £45.20 a year in interest.

The best notice accounts offer slightly higher rates than the best fixed-term bonds.

These also come with more flexibility when accessing your cash.

Tipton & Coseley’s 60 day notice account offers savers 4.60% back with a minimum £1,000 deposit, for example.

West Brom Building Society’s 90 day notice account offers 4.60% back to those with less money to save, requiring a minimum deposit of £1.

This means that if you were to save £1,000 in this account, you would earn £46 a year in interest.