ISA rates plummeting

ISA rates have been hit particularly hard by the recent cut in the Bank of England base rate to 0.25%, according to financial website Moneyfacts.

The average one-year fixed ISA rate had fallen to 0.87% by last month.

Locking your money away for longer will only give you a slightly better rate typically. A long-term fixed ISA rate lasting at least 18 months pays 0.98% on average.

Charlotte Nelson, Moneyfacts’ finance expert, says: “Activity in the ISA market tends to remain stable in the winter months, with most of the activity occurring during the ISA season, so the fact providers are actively cutting at this time of year is notable.”