SOME have dubbed it "the worst cash Isa season ever", says Sylvia Morris on ThisIsMoney.co.uk. Despite hopes of an imminent interest rate rise, cash Isa returns have tumbled to their lowest rates since their introduction 15 years ago.
The average rate on an easy-access account for new savers is now just 1.17 per cent, including an initial bonus, or 0.6 per cent without. On one-year, fixed rate deals it is 1.49 per cent – "a huge 26 per cent down on the 2.02 per cent on offer a year ago".
Tax-free savings accounts remain "incredibly popular", but the bottom line is that providers are simply "not hungry for your money", says Kevin Mountford of MoneySupermarket.com. Just two of the bigger names – HSBC and Nationwide – have offered new deals so far. So where's the best place to park your £5,760 annual allowance? The current top easy-access offer is Britannia's Select Isa 2, at 1.75 per cent. But better deals may emerge, so keep your eyes peeled.
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The problem facing many savers is that, five years into a stock market bull run, the attraction of piling your Isa cash into shares is beginning to pale, says David Budworth in The Times. The gradual withdrawal of QE has been causing havoc in emerging markets – and "the bears have started to re-emerge from their dens" in developed markets too. George Soros isn't the only big name now betting against the US stock market. The S&P 500, which hit fresh peaks last week, is being "propelled" by investors borrowing record amounts of cash, notes Michael Mackenzie in the Financial Times. In the past, this "has been a precursor to big bear markets". There are now "concerns over the potential for a sharp correction".
Many think there's still plenty of mileage in the final stages of the bull run and, to my mind, "bull and bear are looking equally matched", says Budworth. As a long-term buy-and-hold investor, I'll be putting my Isa allowance into stocks and shares. But if you're only now contemplating jumping on board, "you might want to think twice". As the legendary trader Barton Biggs observed: "A bull market is like sex – it feels best just before it ends."
