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ISA season returns with biggest rises seen in a decade

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Rachel Springall, Press Officer
Rachel Springall, Press Officer / Finance Expert T: 01603 476210 E: Email Rachel
19/04/2022

ISA season returns with biggest rises seen in a decade

ISA season returns with biggest rises seen in a decade

Moneyfacts UK Savings Trends Treasury Report data shows ISA season has returned for savers as some sectors see the biggest month-on-month rate rises recorded in a decade.

 

Moneyfacts UK Savings Trends Treasury Report data shows ISA season has returned for savers as some sectors see the biggest month-on-month rate rises recorded in a decade.

 

  • The easy access ISA rate rose month-on-month to 0.38%, the biggest monthly rise since April 2012, and stands at its highest point since June 2020 (0.45%). The average notice ISA rate also rose to 0.51%, the biggest rise since September 2018, and the highest point since November 2020 (0.54%).
  • The average one-year fixed ISA saw the biggest month-on-month rate rise since August 2011, rising to 0.87%, its highest point since May 2020 (0.91%). The longer-term fixed ISA rate rose to 1.30%, the biggest month-on-month rise since July 2008 and stands at its highest point since February 2020 (1.34%).
  • The average easy access rate rose to 0.33%, the biggest rise since August 2007 and its highest since May 2020 (0.40%). The average notice rate rose to 0.67%, the biggest rise since June 2011 and the highest since June 2020 (0.69%).
  • The average one-year bond rate rose month-on-month to 1.06%, the biggest rise since April 2011 and is at its highest since April 2020 (1.09%) and the first time it has breached 1% since April 2020. The average long-term fixed bond rate rose to 1.48%, the biggest rise since August 2009 and stands at its highest since January 2020 (1.48%).
  • Product choice overall has grown by 336 deals year-on-year, to 1,676 savings deals (including ISAs). ISA product choice has grown year-on-year by 112 deals to 413, the first breach of 400 since March 2020.
  • The easy access ISA rate rose month-on-month to 0.38%, the biggest monthly rise since April 2012, and stands at its highest point since June 2020 (0.45%). The average notice ISA rate also rose to 0.51%, the biggest rise since September 2018, and the highest point since November 2020 (0.54%).
  • The average one-year fixed ISA saw the biggest month-on-month rate rise since August 2011, rising to 0.87%, its highest point since May 2020 (0.91%). The longer-term fixed ISA rate rose to 1.30%, the biggest month-on-month rise since July 2008 and stands at its highest point since February 2020 (1.34%).
  • The average easy access rate rose to 0.33%, the biggest rise since August 2007 and its highest since May 2020 (0.40%). The average notice rate rose to 0.67%, the biggest rise since June 2011 and the highest since June 2020 (0.69%).
  • The average one-year bond rate rose month-on-month to 1.06%, the biggest rise since April 2011 and is at its highest since April 2020 (1.09%) and the first time it has breached 1% since April 2020. The average long-term fixed bond rate rose to 1.48%, the biggest rise since August 2009 and stands at its highest since January 2020 (1.48%).
  • Product choice overall has grown by 336 deals year-on-year, to 1,676 savings deals (including ISAs). ISA product choice has grown year-on-year by 112 deals to 413, the first breach of 400 since March 2020.
Savings Treasury Report Savings Treasury Report Savings Treasury Report

 

Savings market analysis – average rates

 

Apr-20

Apr-21

Mar-22

Apr-22

Average easy access rate

0.51%

0.16%

0.25%

0.33%

Average easy access ISA rate

0.79%

0.22%

0.30%

0.38%

Average notice rate

0.97%

0.35%

0.56%

0.67%

Average notice ISA rate

1.05%

0.34%

0.38%

0.51%

Average one-year fixed rate bond

1.09%

0.42%

0.89%

1.06%

Average longer-term fixed rate bond*

1.28%

0.65%

1.31%

1.48%

Average one-year fixed rate ISA

1.04%

0.36%

0.72%

0.87%

Average longer-term fixed rate ISA*

1.15%

0.57%

1.12%

1.30%

*Longer-term fixed bonds or ISAs are those with terms over 550 days. Average interest rates based on a £5,000 deposit as at the start of the month.

Source: Moneyfacts Treasury Reports

 

Savings market analysis – product count

 

Apr-20

Apr-21

Mar-22

Apr-22

Number of live savings account options (excluding ISAs)

1,248

1,039

1,255

1,263

Number of live ISA options

340

301

399

413

Source: Moneyfacts Treasury Reports

 

Savings market analysis – average rates

 

Apr-20

Apr-21

Mar-22

Apr-22

Average easy access rate

0.51%

0.16%

0.25%

0.33%

Average easy access ISA rate

0.79%

0.22%

0.30%

0.38%

Average notice rate

0.97%

0.35%

0.56%

0.67%

Average notice ISA rate

1.05%

0.34%

0.38%

0.51%

Average one-year fixed rate bond

1.09%

0.42%

0.89%

1.06%

Average longer-term fixed rate bond*

1.28%

0.65%

1.31%

1.48%

Average one-year fixed rate ISA

1.04%

0.36%

0.72%

0.87%

Average longer-term fixed rate ISA*

1.15%

0.57%

1.12%

1.30%

*Longer-term fixed bonds or ISAs are those with terms over 550 days. Average interest rates based on a £5,000 deposit as at the start of the month.

Source: Moneyfacts Treasury Reports

 

Savings market analysis – product count

 

Apr-20

Apr-21

Mar-22

Apr-22

Number of live savings account options (excluding ISAs)

1,248

1,039

1,255

1,263

Number of live ISA options

340

301

399

413

Source: Moneyfacts Treasury Reports

Rachel Springall, Finance Expert at Moneyfacts, said:

“After a lengthy absence, ISA season is back around the end of a tax-year, with the market seeing the highest uplift in average rates month-on-month in a decade. Those savers who are comparing deals to utilise their 2022/23 allowance will find much better rates on average compared to a month ago, both for variable and fixed ISAs. The improvement to the market over the past year is positive as it’s worth noting that rates fell to record lows in 2021. Compared to a year ago, both the average one-year fixed ISA and longer-term fixed ISA rates have more than doubled.

“Encouragingly for savers, both competition and the recent back-to-back Bank of England base rate rises are elevating interest rates across the savings spectrum. The rate war that has raged within the top rate tables for both fixed bonds and ISAs month-on-month will be positive news for savers who want to lock their cash away for a higher return than they could receive on a variable rate. However, whether someone is comfortable to invest longer-term with rising interest rates remains to be seen. Indeed, according to the Bank of England, there were notable outflows of funds in February from time deposits (£313 million), but significant inflows into sight deposits (£3.5 billion).

“As interest rates rise, savers may well wish to keep their money close to hand so they can switch quickly for a higher return, and thankfully, easy access accounts have seen notable uplift month-on-month, with a rise of 0.08%, this is the biggest rise since August 2007. In the months to come, providers may well improve rates further, and we are already seeing competition return to this sector from challenger banks, some of which are paying 1% or more. However, it may be some time yet before savers see variable rates return to pre-pandemic levels. Whether savers choose an easy access account or fixed, it’s important for them to be conscious of the shelf life of a deal, as this month the average shelf life of a fixed bond fell to 55 days, the lowest number of days since 2021. Keeping a close eye on the market is crucial both for savers to secure a top rate, and for savings providers to keep ahead of the competition.”

Rachel Springall, Finance Expert at Moneyfacts, said:

“After a lengthy absence, ISA season is back around the end of a tax-year, with the market seeing the highest uplift in average rates month-on-month in a decade. Those savers who are comparing deals to utilise their 2022/23 allowance will find much better rates on average compared to a month ago, both for variable and fixed ISAs. The improvement to the market over the past year is positive as it’s worth noting that rates fell to record lows in 2021. Compared to a year ago, both the average one-year fixed ISA and longer-term fixed ISA rates have more than doubled.

“Encouragingly for savers, both competition and the recent back-to-back Bank of England base rate rises are elevating interest rates across the savings spectrum. The rate war that has raged within the top rate tables for both fixed bonds and ISAs month-on-month will be positive news for savers who want to lock their cash away for a higher return than they could receive on a variable rate. However, whether someone is comfortable to invest longer-term with rising interest rates remains to be seen. Indeed, according to the Bank of England, there were notable outflows of funds in February from time deposits (£313 million), but significant inflows into sight deposits (£3.5 billion).

“As interest rates rise, savers may well wish to keep their money close to hand so they can switch quickly for a higher return, and thankfully, easy access accounts have seen notable uplift month-on-month, with a rise of 0.08%, this is the biggest rise since August 2007. In the months to come, providers may well improve rates further, and we are already seeing competition return to this sector from challenger banks, some of which are paying 1% or more. However, it may be some time yet before savers see variable rates return to pre-pandemic levels. Whether savers choose an easy access account or fixed, it’s important for them to be conscious of the shelf life of a deal, as this month the average shelf life of a fixed bond fell to 55 days, the lowest number of days since 2021. Keeping a close eye on the market is crucial both for savers to secure a top rate, and for savings providers to keep ahead of the competition.”

Notes to editors

Pioneering financial comparison technology for over 30 years.

Moneyfacts Group plc is the UK’s leading provider of retail financial product data. Used by virtually every bank and building society in the UK, and supplied to the Bank of England, Financial Conduct Authority, Financial Ombudsman Service, HM Treasury, Prudential Regulatory Authority and UK Finance.

Our expert research team monitors the thousands of mortgages, savings, credit card, personal loan, business banking, life, pension and investment products in the UK.

Moneyfacts is the UK's leading independent provider of finance product data. For over 30 years Moneyfacts' information has been a key driver behind personal finance product decisions.

For more information about us please see our key facts.

Broadcast

Our broadcast suite enables our finance experts to appear in-vision for television, and we regularly comment live on national and regional radio.

To arrange an interview for radio or television, please contact our press department. We have an in-house broadcast room.

 

Notes to editors

Pioneering financial comparison technology for over 30 years.

Moneyfacts Group plc is the UK’s leading provider of retail financial product data. Used by virtually every bank and building society in the UK, and supplied to the Bank of England, Financial Conduct Authority, Financial Ombudsman Service, HM Treasury, Prudential Regulatory Authority and UK Finance.

Our expert research team monitors the thousands of mortgages, savings, credit card, personal loan, business banking, life, pension and investment products in the UK.

Moneyfacts is the UK's leading independent provider of finance product data. For over 30 years Moneyfacts' information has been a key driver behind personal finance product decisions.

For more information about us please see our key facts.

Broadcast

Our broadcast suite enables our finance experts to appear in-vision for television, and we regularly comment live on national and regional radio.

To arrange an interview for radio or television, please contact our press department. We have an in-house broadcast room.

 

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Rachel Springall Press Officer / Finance Expert
Eleanor Williams Press Officer / Finance Expert