For this week’s guide, Anna Bowes, savings expert from The Private Office, reviews the best offers on the savings market after Rachel Reeves delivered a £26bn tax-raising budget…
One of the biggest changes to savers was a cut to the tax-free cash ISA limit from £20,000 to £12,000 from April 2027.
Savers over the age of 65 will continue to be able to save up to £20,000 in a cash ISA each year.
If you want to make the most of a cash ISA now, here’s a look at the best rates in the easy access cash ISA market…
“It’s been low in activity in the easy access cash ISA market over the last couple of weeks, although the top rate available which was also Moneybox has dropped from 4.52% AER to 4.47%,” says Bowes.
“The top three accounts are all via Fintech companies that are not actually banks themselves, however your cash is deposited with regulated and authorised banks that are part of the Financial Services Compensation Scheme (FSCS) – so your money is protected as long as you keep within the £85,000 limit.
“As we always say, it’s important to check all the terms and conditions to make sure you know where your money will be held, and to check for any tricks that could catch you out and see you earning less than you thought, or not having the access you wanted.”
What about fixed rate cash ISAs?
“It’s surprising that there has been much better news in Fixed Rate ISA tables over the last couple of weeks, perhaps due to the news that the cash ISA allowance was expected to be cut in the budget,” says Bowes.
In the 1-year table, Investec has taken the top spot with an ISA paying 4.3% – the highest rate we’ve seen in a couple of months.
And in the 2-year table the current top rate from Secure Trust Bank is 4.17% AER – the highest rate since mid-October.
Sadly, in the 5-year table, rates have not been as resilient; Stalwart UBL reduced the rate it is offering from 4.22% to 4.13% which is now the joint leading rate with Castle Trust upping its offering to make sure UBL was no longer alone.
Here’s a rundown of what’s been happening to other types of accounts – and the best rates on offer.
Easy access
Bearing in mind that the expectation is for a base rate cut at the next Bank of England meeting in December, Bowes says she’s not surprised that there has been very little activity in the easy access market.
In fact, it’s good news that things have actually remained very stable.
Monument Bank is still at the top with its Easy Access Savings Boosted Rate account paying 4.51% AER.
Fixed rate bonds
In the 1-year table we have a new leader, which is always exciting, says Bowes.
Investec has launched a new market leading bond paying 4.50%. The rest of the providers are yet to react, but on the plus side not too many providers have been cutting rates.
In the two-year table, a couple of new rates have entered over the last couple of weeks, taking the average of the top five accounts up from 4.39% to 4.40%
Sadly, for the five-year table, all of the leaders dropped away, leaving Chetwood Bank in the top spot, paying 4.30%.
“This activity could be another indication that markets are anticipating a base rate cut in December,” says Bowes.