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House Price Crash Forum

Cash is Toast - Dump Cash ISA's NOW!


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....if you haven't dumped them already.

Headline inflation figure for this month (reporting Nov) is 4.6% (RPI 7.7%)

Each month the B.O.E reports interest rates, their official blurb is here:

Quoted rates are headline interest rates advertised by banks and building societies for household saving and borrowing, weighted together using business volumes reported by those institutions. Data for February 2019 onwards will be based on the whole market of UK Monetary and Financial Institutions (MFIs), and calculated as monthly averages.

Source: Further details about quoted household interest rates data | Bank of England



Monthly rates for 2 year fixed cash ISA's is 0.32%

The rate for 1 year fixed cash ISA's (not shown in the graph) = 0.28%


The Point

Inflation is higher than the interest paid by the ISA - meaning you are losing money. (as you have diminished purchasing power)

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With current rates, yes, but hopefully IRs will go up soon making it worthwhile having cash in an ISA wrapper, so we'll be using our allowances (£20k x2) again next year at the best rate we can get. 

Currently, our best cash ISA rate is 2.3% fixed until the end of 2023.

You can always take it out but you can't put it back in.

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I suppose the problem is the allowance. If/when IR rise then everyone suddenly wants to ram everything in there and you cant. 

To get 400k into ISA's will take 10 years. (40k*10). 

So one has to feed money in there over the years BUT suffer the negative real rates now, of around -5%. 

Inflation is currently, essentially, a tax on saving...

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