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ISAs could be savers’ salvation

ISAs could be savers’ salvation

Category: Savings

Updated: 11/02/2010
First Published: 11/02/2010

MONEYFACTS ARCHIVE
This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

Savers have been dealt a further blow after the Bank of England suggested interest rates could remain at 0.5% until next year.

Having sat at a record low since last March, the Bank's latest quarterly inflation report predicts base rate might not rise until well into 2011, as the economy continues its struggle to recover.

Returns on millions of savings accounts have slumped as a consequence, while another threat, in the form of inflation, could soon reduce the real incomes received even further.

According to the report, inflation is likely to have increased above 3% during January and is predicted to stay around this level in the near term.

The one crumb of comfort savers can currently rely upon is the imminent arrival of the 2010 ISA season.

Providers keen to secure their share of savers' cash traditionally offer improved rates around this time of year.

Savers over the age of 50 have this year seen their ISA limit rise from £7,200 to £10,200, of which up to £5,100 can be saved in a cash ISA.

The new limit will be applied to everyone from 6 April 2010.

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