What a difference five years makes…
Five years ago, the average Cash ISA offered a comparatively attractive rate of 2.52%. This has fallen to just 0.33% and looks unlikely to rise any time soon.
In contrast, the FTSE All Share Index currently offers a return of 3.62% (variable) and has provided a rising income.
What are the options for Cash ISA savers?
Some economists don’t believe interest rates will rise until 2019 at the earliest given the uncertainty around the upcoming Brexit negotiations. Even if they do, any rate rises are likely to be very gradual. Hence, many savers are understandably looking at other ways to get a decent income from their ISAs.
If you’ve got sufficient cash set aside for a rainy day and are happy with the additional risks, you could consider transferring to a Stocks & Shares ISA for potentially greater returns.
As discussed above, the yield offered on the UK stock market is currently nearly 11 times that of the average Cash ISA. Investing in the stock market has also provided the best chance of beating inflation over the long term. This is because unlike cash, shares can rise in value and increase their dividend payments over time, allowing them to keep pace with rising prices.
My ISA account is with Hargreaves Lansdown. Their ISA account is very competitive and the transfer process is straight forward so you may feel comfortable in transferring online. However if you would like some support and guidance please call me on 07770 575 122 and I will be in touch.
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