Isa season set to disappoint this year as rates keep falling

Savers looking for a decent home for the remainder of their cash Isa allowance are set to be disappointed.

Experts have warned there is unlikely to be a proper Isa season this year, with many big banks already slashing rates.

Between now and April is known as ‘Isa season’ when banks launch top deals in a bid to attract last-minute savers keen to use up their annual tax-free allowance before the tax year ends on April 5 — or early birds who want to stash their new allowance as soon as it resets. 

But this year none of the big providers contacted by Money Mail, including Barclays, Halifax, Lloyds, Nationwide, NatWest, HSBC and RBS, plan to offer new deals.

Instead, three big banks, Co-op Bank, NatWest and RBS, are cutting their easy-access cash Isa rates. 

It means the best Isa rate you can currently earn with big banks is 0.75 per cent. And this rate is only available to HSBC customers with its Premier current account. 

Some cash Isas pay as little as 0.2 per cent. You have until April 5 to use your £20,000 cash Isa allowance for this tax year.

If you don’t use it, you lose it: you cannot carry it over. You get another £20,000 allowance on April 6 to use by April 5, 2021.

The advantage of a cash Isa account over an ordinary savings account is that you don’t pay tax on any of your interest.

However, James Blower, founder of Savings Guru, says: ‘There won’t be a proper Isa season. 

‘The big banks are awash with cash so there is no point in them paying better rates to attract more. 

‘Smaller banks pay more but they get swamped by keen-eyed savers when they sit at the top of the best-buy tables. So they quickly close the account to new savers.’

Anna Bowes, director at Savings Champion, says: ‘Rates are falling and Isa savers will be victims of these cuts.’

[email protected]