5 million losing out as £43billion sits in low interest ISAs

• Over £43billion[i] is sitting in UK cash ISA accounts earning returns of 1.50% or less
• There are almost 5 million instant access cash ISA accounts held earning low rates in the UK with an average balance of over £8,500.
• Almost half (45%) of Brits stated if they were given £400 they didn’t need to give back they would save it – yet those leaving funds languishing in low interest accounts could be missing out on that amount.

Millions of Brits are potentially missing out on hundreds of pounds extra income[ii] a year because their cash ISA savings are in accounts paying 1.50% or less, analysis from Yorkshire Building Society and CACI suggests. 

There are nearly 5 million[iii] instant access cash ISA accounts earning 1.50% or less in the UK with the average balance of over £8,500. 

The analysis is in addition to that highlighted earlier in the year showing almost £400bn[iv] is being held in current and savings accounts earning 1% interest or less, meaning millions are losing out on additional income.

Research[v] also completed by Yorkshire Building Society suggests that almost half (45%) of Brits stated if they were given £400 with no catches they would save the money. 

Savers who are currently leaving their funds in low paying cash ISA’s could move their tax free savings to Yorkshire Building Society’s Double Access ISA which currently pays 4.70% and earn over £400 in interest a year.

Chris Irwin, director of savings at Yorkshire Building Society, said: “It’s surprising to see such a large amount sitting in low paying ISA accounts after a period of significant increases to savings interest in the last two years.  This data follows on from our analysis earlier in the year calling for consumers to take time to review their finances.

“The start of a new financial year gives the perfect opportunity to review finances and make the switch from low paying accounts.  Although we’ve seen the Bank rate increase this analysis clearly shows that there are still many accounts which continue to pay low rates despite those increases. Its important savers take action and think about how they can make their hard-earned cash go as far as possible. Last year, our savings rates paid an average of 1.01% more than the market average rate so we are encouraging customers to review their savings and get the information they need to make sure they aren’t missing out.”

Rachel Springall, Finance Expert at Moneyfacts, said: “This research emphasises why consumers need to regularly check the rate they earn against the market and not presume they are getting a decent return. It is wise to make a diary note to proactively review and switch existing ISA pots to keep their tax-free wrapper and chase better returns. Leaving Cash ISAs unchecked or becoming apathetic can be costly, as savers may miss out on a better rate without realising it.”