easyMoney urges ISA savers to invest before rates fall
Peer-to-peer lending platform easyMoney has urged ISA savers to put their money to work after new research revealed that cash ISA balances have been increasing.
In December 2023, the current outstanding cash ISA balance for the UK was currently £337.4bn, a 15 per cent increase from the £227.4bn reported in December 2013.
Since the Bank of England started to raise interest rates in December 2021, savers have been putting more away, as the total cash ISA balance outstanding has increased by an average of 0.61 per cent per month.
At the start of 2023, cash ISA savings began to accelerate, with account balances growing by 1.4 per cent per month. This has pushed the total outstanding balance to the largest total seen in the last ten years.
However, Jason Ferrando, chief executive of easyMoney, said that it is important to invest ISA savings before rates come down again.
According to Moneyfacts data, cash ISA rates have already started to fall, in anticipation of a base rate cut. The average easy access rate fell for a consecutive month to 3.15 per cent, while the average notice rate fell to 4.38 per cent, the first month-on-month fall since February 2022.
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“There has arguably never been a better time to invest in an ISA,” Ferrando said.
“Rates may have come down a tad in recent months, but they’re still remarkably high compared to anything we’ve seen for many, many years.
“So it’s important that you get your money invested before rates come down any further, and also that you make the most of your annual ISA tax allowance by investing ahead of the April tax deadline when everything will reset for the next financial year.
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“When rates inevitably come back down to earth, as they are already showing signs of doing, don’t forget that there are great alternatives to your traditional cash ISA, such as Innovative Finance ISAs (IFISAs), which deliver far more favourable returns.”
easyMoney is the largest IFISA provider in the UK, with approximately £72m invested in the tax wrapper. Its IFISA accounts pay between 5.53 per cent and 10 per cent per annum.
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