Savers could lose out on hundreds of pounds if they fail to switch accounts during the upcoming ISA season, according to analysis from Moneyfactscompare.co.uk. The research highlights a 'loyalty penalty' as providers compete fiercely for new deposits, with the average closed easy access ISA offering just 2.51% AER compared to the top rate of 4.66% AER. This difference amounts to a £430 shortfall on a full £20,000 deposit over 12 months.
The forthcoming ISA season, running from March to May, is expected to be among the most competitive on record. Over the past two years, savers have enjoyed the strongest returns on leading easy access cash ISAs during this period, with many attractive rates emerging towards the end of the window. Caitlyn Eastell, personal finance analyst at Moneyfactscompare.co.uk, advised savers to remain flexible and monitor the market beyond the April deadline to potentially secure higher returns.
The analysis also noted that the Middle Eastern conflict has 'drastically changed the outlook for interest rates', forcing providers to react to shifting expectations. This could mean rates remain elevated for longer, benefiting savers who shop around. With around 15 million ISA accounts held in the UK, the stakes are high for those who fail to act.
Eastell warned: 'Savers who have left their money in the same account are being hit with a serious loyalty penalty. The average closed easy access ISA rate pays just 2.51% AER, whereas the highest rate pays over 4.60% – equating to around a £430 loss on a full £20,000 deposit over a year.' She urged savers to find a balance, as leaving money in a low-paying account for too long could mean missing out in real terms.
