Are you trapped in Britain’s worst Isa?

BANkS and building societies are littered with cash Isa accounts paying as little as 0.05 pc interest.

Launched nearly 14 years ago to develop and encourage the savings habit through tax breaks, tax-free cash Isa accounts have been popular with savers.

They have piled a huge £210 billion into these accounts, with £28 million added in the past 12 months.

But savers have been hit by a triple whammy — low interest rates, poor treatment from banks and building societies and the Chancellor’s refusal to date to allow them to put the whole of each year’s Isa allowance into cash.

Savers who picked the top-paying cash Isas last year have earned 60 times more than those in the worst payers.

Our research shows the best from 2012 was NatWest e-ISA, which paid 3pc.

But not all savers in this NatWest account have earned that rate over the past 12 months. Your rate depends on when you opened your account.

If you have been sitting on it for more than a year, it could be 2 pc or 2.75 pc on balances up to £10,000, depending on when you took it out.

The rest of the best payers from the past 12 months are listed (right).

It is crucial to make sure that your money is working as hard as possible by switching your money to a decent account. Savers have suffered nearly four years of low interest after High Street cash Isa rates plummeted from around 5 pc to just 0.59 pc.

Over the years, banks and building societies have launched a string of new accounts, which they have since closed to new savers. Once closed, the rate can drop dramatically.

They would rather you focus on the headline rate for new savers and think you earn this higher rate, even though you earn a pittance.

No fewer than 23 cash Isa accounts with large banks and building societies pay 0.5 pc or less to savers, mainly on closed accounts.

Often, the accounts have similar or even the same name as yours, but with a different issue number.

You can still earn 2.75 pc on the toppaying cash Isa from M&S Money — though this will drop to 2.25 pc in March.

That means an extra £270 interest a year on each £10,000 in your account if you are stuck in the lowest paying account, C&G Cash Isa at 0.05 pc.

Money Mail research reveals savers earn an average 1.26 pc on their cash Isas now in open accounts.

If you add in the bonuses that are often paid for the first year, the average rises to 2.03 pc.

This is well down on a year ago when the rates were 1.4 pc and 2.41 pc.

Rates have fallen since the Government’s Funding for Lending Scheme, launched in the summer, offered banks and building societies a cheap source of finance, so they no longer have to rely so much on savers.

C&G Cash Isa with its risible 0.05 pc gives just 50p interest on each £1,000 in the account for loyal savers. The bank offers new customers 2 pc including a bonus. There is nothing to stop you switching to the newer version of the account, but the bank won’t automatically do it for you.

Other poor deals include Halifax Variable Rate Isa Saver at 0.1 pc, now closed to new savers.

They can earn 1.6 pc simply by switching to the bank’s Isa Saver Variable, giving a potential £150 extra interest a year on savings of £10,000.

Finding out what you actually earn takes determination and can be baffling.

For example, among the large providers, you earn one of 18 different rates — from 0.25 pc to 3 pc — with Halifax.

It depends if you have Isa Saver Online, Isa Saver Variable, Isa Saver Direct or Variable Rate Isa Saver and when you opened the account.

At Santander, there are 13 different rates from 0.1 pc to 3.3 pc in Direct Isa issues 1 to 13, Easy Isa or Flexible Isa issues 1 to 5. Nationwide has more than 14 rates on its Online Isa issues 1 to 7, its 75-Day Isa, 90-Day Isa, Champion Isa, Instant Access Isa, E-Isa or Flexclusive Isa with rates between 0.25 pc and 4.25 pc.

Banks and building societies now have to print your rate on your statement — but that arrives only once a year.

So, your money could sit in one of these low- paying accounts for several months before you realise just how poor the rate is.

HOW TO TRANSFER YOUR CASH ISA

YOu can transfer your money from one cash Isa provider to another. Check your new provider accepts transfers — not all the top-paying accounts do.

Ask your new provider to arrange the switch. The move should be completed in a maximum 15 working days. Your bank or building society has to inform you of any delays.