While the Cash ISA has been a popular product for savers who want to shelter their money away from the taxman, it's no secret that its returns over the past few years have been derisory. According to data from personal finance website Moneyfacts, the average easy access Cash ISA rate fell from 2.56% in January 2012 to just 0.37% in May this year. That means, despite the annual Cash ISA allowance having almost quadrupled from £5,340 to £20,000 over that time, savers are actually earning less tax free income than they were 5 years ago. Not only do savers have to contend with falling interest rates, they now have to face the challenge of rising inflation. Having been at or near 0% for all of 2015, and below 1% for much of 2016, it has just been announced that the UK CPI measure of inflation moved to 2.9% in April this year. This pushes the rate further above the Bank of England's 2% target, to its highest level since June 2013 and even above the 0.48% inflation rate being seen in Zimbabwe! | |
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