Savers and investors could miss out on thousands without P2P
Peer-to-peer lending platform Easymoney has warned that savers and investors could be missing out on thousands of pounds in interest by failing to consider P2P options.
New research from the property lender found that few banks and savings institutions have improved their savings rates in line with the base rate increases. In fact, Easymoney found that the average instant access savings rate currently stands at just 1.53 per cent – less than half the current Bank of England base rate. The best easy-access Cash ISA rates are just 1.8 per cent.
Easymoney noted that the average UK household has a savings pot of £76,301. Investing this in a 1.8 per cent savings account would return just £1,373 per year. However, by investing in an Innovative Finance ISA (IFISA), via a P2P platform which pays 5.52 per cent, the average investor could earn £4,212 in annual returns.
Easymoney recently raised its returns, bringing its annual target returns to 4.53 per cent on investments of £100 or more; 5.52 per cent on investments of £20,000 or more; and 6.51 per cent on investments of £100,000 or more.
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“With the cost of living crisis continuing to stretch our household finances to breaking point, many will be looking at how they can make their savings pot work best for them, while also maintaining a degree of flexibility and accessibility that will allow them to cover any unforeseen expenses,” said Jason Ferrando, chief executive of Easymoney.
“While both a conventional savings account or an easy access cash ISA tick these boxes, it’s galling to see that so many providers are not up to the job in providing honest returns.
“Borrowers are being squeezed by higher high street loan rates yet the same institutions have failed to pass on the relative counter-benefit to their savers and investors.
“The public will be forgiven for thinking that they are being fleeced as banks and building societies simply hoard more investors’ cash in their vaults rather than giving their customers a fair deal.”
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