Anyone with cash ISA given £185 warning as expert says 'many savers don’t realise'

Anyone with cash ISA given £185 warning as expert says 'many savers don’t realise' BNew figures show extent of losses made by people not changing accounts Anyone with a cash ISA has been given a £185 alert as new figures show just how many people have their money in an account paying virtually no interest. New analysis from Skipton Building Society reveals that £85.5bn is sitting in instant-access cash ISAs opened between 2000-2019, paying an average rate of just 1.94%, despite newer accounts offering rates close to double that. The average balance held in these older instant-access ISAs is £9,469. At the weighted average rate of 1.94%, that balance would earn around £184 a year in interest. At 3.90%, it would earn around £369 a year, meaning an average account could generate approximately £185 more interest annually. According to Skipton’s survey of 2,000 adults, nearly a third of savers think about their personal financial situation daily (29%), such as household bills and salaries. Yet many may be overlooking one of the simplest ways to boost their returns: reviewing older savings accounts and checking whether their money could be earning a more competitive rate. Alex Sitaras, Head of Savings at Skipton Building Society, said: “With many savers continuing to feel pressure from wider living costs, reviewing savings products remains one of the simplest ways people can improve returns on money they already have. If you’ve had an ISA for several years, make sure you check the rate and compare what you’re earning with what’s available on the market, as many savers don’t realise their interest rate is no longer competitive. “With UK Savings Week encouraging people to take stock of their finances, now is a good time to make sure your savings are working as hard as possible. Don’t be afraid to shop around or transfer an old ISA if it means getting a better return. In today’s market, it’s important to review your savings regularly, especially if your financial goals or circumstances have changed.” Rachel Springall, Finance Expert at Moneyfacts also noted: “The scale of cash earning such poor rates within an ISA wrapper is a stark reminder of how much savers could be missing out on by assuming their interest rate is still competitive. It’s easy for savings to be overlooked, particularly when an account has been held for several years and savers are familiar with their provider or simply don’t think to review the rate. A regular review of savings accounts is well worth the time, particularly for those who are looking to make their money work harder amid ongoing household cost pressures. “Transferring ISA pots doesn’t take too long to do, and savers could be pleasantly surprised by how much more interest they could earn by moving their cash to a more competitive account. To keep the cash protected under the ISA wrapper, it’s important to use the new provider’s ISA transfer process rather than withdrawing the money and reinvesting it themselves.” Some £95.58 billion was subscribed into adult cash Isas in the tax year 2024-25 – a figure which surged by more than a third compared with the previous year, according to new figures from HM Revenue and Customs (HMRC), released last week. In total, the revenue body said around £135.7 billion was subscribed to adult IISAs in 2024-25 – a £32.7 billion annual increase. The £32.7 billion increase was driven by a rise in cash Isa subscriptions, which grew by 37.5% or £26.1 billion. Stocks and shares Isa subscriptions saw a 19.7% or £6.1 billion annual increase, and lifetime ISA subscriptions had a 20.1% or £472 million rise. Money held in ISAs is ringfenced from tax. The report said: “This large increase in cash ISA subscriptions can be explained by the Bank of England bank rate and the interest swap rates which were at their highest levels during the 2023-24 and 2024-25 tax years “Increased returns to savings are likely to have increased the attractiveness of ISAs as a means to reduce savings income tax liabilities.” At the end of the 2024-25 tax year, the market value of adult Isa holdings stood at £952 billion – an 8.5% increase compared to the value at the end of 2023-24. In 2024-25, £2.5 billion was subscribed to junior Isas, around 38.3% of which was in cash.