• Pensions

    Pensions+

    Whether you're saving for retirement or you are facing decisions at retirement, we can help

    View more
  • Savings Planning

    Savings+Planning

    Saving for the future is important and we can help you select the right product to achieve your goals

    View more
  • Mortgage Advice

    Mortgage+Advice

    We are specialists in arranging mortgages for First Time Buyers, people moving home, 'Buy to Let' mortgages and remortgages.

    View more
  • Investment Advice

    Investment+Advice

    Make the most of your money and don't leave it languishing in Building Society accounts

    View more
  • Equity Release

    Equity+Release

    Allows you to access cash tied up in your home - speak to one of our qualified advisers

    View more
  • Protect Insure

    Protect+Insure

    We can shop around for the lowest cost life cover, income protection and critical illness cover

    View more
 

Cash NISA rates – not so nice for savers

July 1st sees the introduction of the New ISA, boosting your tax-free savings allowance to £15,000 every year. Yet with banks cutting their interest rates, a Cash NISA may not be the best place for your money.

New ISAs simplify the rules around tax-free saving. You can save £15,000 in a Cash NISA, a Stocks and Shares NISA or any combination of the two. Understanding the difference between the two types of NISA is crucial to meeting your financial goals. Our NISA Quick Facts guide covers the important changes in detail.

According to our recent research, 44% of Britons intend to save in cash alone*. Yet, in doing so, they could be reducing the value of their savings over time and falling far short of their goals. Many savers forget to take the effect of inflation into account when planning for their future. With the inflation rate at 1.5%, any interest rate below this would give you a real-terms decrease in the monetary value of your savings. The Government’s target for inflation is 2%, so you’d need to find an interest rate much higher to see any real growth in your savings.

While New ISAs are intended to benefit savers, it seems the banks have started penalising them by cutting their interest rates on Cash NISAs. The top rate of interest available on an easy access NISA is 1.75% – only just beating inflation. You can get a fixed rate Cash NISA that offers 2.85%, but will need to lock your money away for five years.

It’s clear that if you intend to invest solely in Cash NISAs, where interest rates are so low, your savings could actually lose more value over time than they earn.

Generally speaking, NISAs are a great way to get more for your money and reach your financial goals, and we support the recent change. The key is to invest wisely. You can save your £15,000 tax-free allowance in a Stocks and Shares NISA and benefit from a long-term return above inflation. Despite only 5% of Britons planning to invest in stocks and shares alone*, they have consistently performed better than cash. In the 2013/14 tax year, the average Cash ISA returned 1.69%, while the average Stocks and Shares ISA retuned 9.42%.

Investing in a Stocks and Shares NISA is simpler, and cheaper than you might think. Plus, you can use ourimpulseSave® technology to top-up your NISA on-the-go with just £1. We offer a wide range of investment options to match your personal attitude to risk and financial goals.

The introduction of NISAs is a great time to take control of your finances and start making real progress towards your goals. If you’ve always saved in a Cash ISA, consider making the switch to a Stocks and Shares NISA. You’ll get a better potential return on your money.

Our White Paper, Tackling the Savings Gap, covers the introduction of NISAs in more detail. We surveyed over 2,000 people to get their first impressions and the responses are fascinating. We know the road to changing the UK’s savings habits is a long one, but we’re determined that everyone should have access to the information they need to make the right choices about their future wealth.

* All statistics sourced from Tackling the Savings Gap.

Capital at risk, investments can fluctuate in value and investors may not get the amount back they invest. Tax rules can change at any time.

Source:  True Potential LLP

For links, visit:  http://www.tpllp.com/cash-nisa-rates-not-so-nice-for-savers-2/

Sam: 1st Jul 2014 16:00:00

 

Latest News

Lenders relax maximum mortgage age
Lenders relax maximum mortgage age If you're an older homeowner, the last few years may have been challenging if you were looking to remortgage your property.

Read More >>

Drawdown investors remain optimistic
Drawdown investors remain optimistic The onset of the pension freedoms gave retirees more choice than ever over how to spend their pension pot, and many are making the most of that flexibility by opting for income drawdown, whereby their pension savings remain invested in the stock market. Yet this in itself can pose risks, particularly given how volatile the stock market can be, but luckily, investors don't seem to be put off.

Read More >>

Equity release lending hits record £3.6bn
Equity release lending hits record £3.6bn 2018 proved to be another record year for the equity release sector, with latest figures revealing that retired homeowners released £3.6bn in property wealth over the year, the highest annual total ever seen – and by all accounts, 2019 could go even better!

Read More >>

Motivation to remortgage at 11-year high
Motivation to remortgage at 11-year high The financial incentive for mortgage borrowers reaching the end of their current fixed rate deal to remortgage to a new deal has soared to an 11-year high.

Read More >>

What's coming up in 2018....

Read More >>

See all News...
  • Pensions

    Pensions+

    Whether you're saving for retirement or you are facing decisions at retirement, we can help

    View more
  • Savings Planning

    Savings+Planning

    Saving for the future is important and we can help you select the right product to achieve your goals

    View more
  • Mortgage Advice

    Mortgage+Advice

    We are specialists in arranging mortgages for First Time Buyers, people moving home, 'Buy to Let' mortgages and remortgages.

    View more
  • Investment Advice

    Investment+Advice

    Make the most of your money and don't leave it languishing in Building Society accounts

    View more
  • Equity Release

    Equity+Release

    Allows you to access cash tied up in your home - speak to one of our qualified advisers

    View more
  • Protect Insure

    Protect+Insure

    We can shop around for the lowest cost life cover, income protection and critical illness cover

    View more