Martin Lewis advises on opening a Lifetime ISA
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The UK savings provider has two new fixed cash rate ISAs and two new fixed rate Bonds. According to data available via Moneyfacts all four accounts offer some of the highest rates currently found on the high street.
The minimum investment is £1,000 and there’s no limit on how much people can save.
Furthermore, savers can move ISA balances from other providers or from an existing Furness ISA.
An ISA – Individual Savings Account – is a savings account which offers tax-free interest payments.
There is a limit to how much money someone can put into an ISA in each tax year, which is £20,000 for 2022.
As well as its ISAs, the building society also has a two-year fixed rate Bond offering 1.70 percent AER and a five-year fixed rate Bond at 1.85 percent AER.
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The minimum investment for the bonds is also £1,000, with a cap of £250,000 for single accounts and £500,000 for joint accounts.
Neil Alcock, head of savings strategy, said he hoped the new rates would ease some of the current financial pressures.
“As a mutual organisation, we always have the interests of our customers at heart, and now more than ever, people need our support.
“The recent rise in inflation and the latest base rate increase has caused understandable concern and as Rishi Sunak confirmed in this week’s Spring statement, the outlook for the economy remains uncertain.”
He continued: “We hope that by highlighting some of the benefits of the base rate increase through our savings accounts, we will help ease some of the pressure being caused by the increasing cost of living for our customers.
“The range of competitive fixed rate savings accounts now available will help households to make more of their savings in 2022 and beyond.”
Meanwhile, experts claim that UK banks are not passing on higher interest rates to their customers, resulting in them losing “billions of pounds” in interest.
Laura Suter, AJ Bell’s head of personal finance, said: “While banks are very quick to pass on any base rate increases to their mortgage customers, savers have to wait longer and many won’t see any increase at all.”
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She continued: “Lots of people’s savings are just sitting in their current account or old savings account, earning 0.01 percent.
“And these people likely won’t see an increase in the interest rate they’re being paid, instead banks will pocket the difference to boost their profits.”
Financial journalist Martin Lewis recently asked the question “use, lose or ditch entirely” when it comes to ISAs.
He concluded: “Most should ditch cash ISAs for accounts that pay more.”
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