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Which? reveals most reliable cash Isa providers

Building societies are less likely to cut cash Isa rates

Which? analysed rate cuts among 21 leading Isa providers over the past six years  

New Which? research has revealed the cash Isa providers most likely to keep their rates competitive, as well as the worst offenders for cutting savings rates.

Our analysis of 21 leading instant-access Isa providers uncovered a staggering number of rate cuts over the past six years.  

NatWest had the worst record on a cuts-per-account basis between April 2010 and April 2016, while building societies were typically more dependable.

The Which? Money Compare savings and Isa tables let you search hundreds of savings accounts and Isas from providers large and small to find a great savings rate based on quality of service as well as cost and benefits.

Which Money Compare table: instant-access cash Isas – find a great deal based on quality of service as well as cost and benefits

Most dependable cash Isa providers

Our research focused on cuts for existing Isa customers and excluded cuts they would have known about when they took out the account, such as bonus rates.

Principality Building Society came out top having made just one cut across five Isas, while West Bromwich continued to pay existing customers the 1.25% – 1.55% rate they signed up to, even though the accounts have now closed to new business. 

Coventry Building Society also deserves credit for rewarding existing customers, all of whom currently earn upwards of 1.5% on closed accounts.

Worst offenders for cutting cash Isa rates

Our analysis revealed that NatWest was the worst offender for cuts-per-account, with eight cuts across two accounts over six years. Its e-Isa earned savers 2% in 2010, but customers who haven’t moved their money will be earning a meagre 0.25% now. This means consumers saving the same amount in 2016 as 2010 are £178.50 a year worse off than they were when they took their Isa out. NatWest told us it no longer offer introductory ‘teaser’ rates or products such as the e-Isa that are only available to certain customers.

We also looked at the Isa accounts paying the stingiest rates to existing customers. M&S Bank’s Flexi Cash Isa was the worst culprit, paying customers just 0.05% since all of its 30-month bonus rates expired. Halifax, Lloyds and Santander all offer accounts with short term introductory rates fall as low as 0.25% if customers don’t switch away.

Harry Rose, Which? Money Editor, said: ‘Many savers simply want a provider they can trust to keep their Isa rate competitive. Too many banks are paying truly woeful rates of interest or are scissor-happy when it comes to cutting rates often penalising their most loyal customers.    

‘Our research shows savers who don’t want to have to keep moving their savings about should consider parking their cash with one of the more reliable building societies who have been better at not cutting their rates for existing savers.’

Where can consumers turn for a reliable savings rate? 

The table below shows the rate cuts for existing customers of instant-access Isas from April 2010 to April 2016, including those closed to new business. We haven’t included expected cuts, such as bonus rates expiring or Isas that automatically mature into a different account after 12 months.

Providers have been ranked by number of cuts per account.

Provider Most cuts overall Number of accounts rate cuts applied to Cuts per account Worst Isa rate in April 2016 Best Isa rate in April 2016
NatWest 8 2 4 0.25% 0.25%
Tesco Bank 3 1 3.00 0.75% 0.75%
Royal Bank of Scotland 2 1 2.00 0.50% 0.50%
Barclays 13 7 1.86 0.90% 0.90%
Marks & Spencer Bank 5 3 1.67 0.05% 1.30%
HSBC 6 4 1.50 0.30% *1.30%
Yorkshire Building Society 9 6 1.50 1.00% 1.35%
Virgin Money 52 37 1.41 1.11% 1.56%
Lloyds TSB 2 2 1.00 0.25% 0.60%
Sainsbury’s Bank 1 1 1.00 0.50% 1.30%
Clydesdale Bank 2 2 1.00 0.90% 0.90%
Post Office Money 14 19 0.74 0.25% *1.10%
First Direct 2 3 0.67 1.30% 1.30%
Coventry Building Society 3 5 0.60 1.40% 2.15%
West Bromwich Building Society 5 9 0.56 1.25% 1.55%
Santander 12 23 0.52 0.10% 1.50%
Nationwide Building Society 23 53 0.43 0.25% 1.75%
Halifax 2 5 0.40 0.10% 0.60%
Skipton Building Society 4 15 0.27 0.50% 1.60%
Leeds Building Society 2 9 0.22 0.75% 1.50%
Principality Building Society 1 5 0.20 0.60% 1.30%

Table notes: Where necessary, we have assumed the customer took the Isa out in April 2010. All figures assume savings of £15,000.

* rate includes bonus

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Which? Limited is an Introducer Appointed Representative of Which? Financial Services Limited, which is authorised and regulated by the Financial Conduct Authority (FRN 527029). Which? Mortgage Advisers and Which? Money Compare are trading names of Which? Financial Services Limited.

Please note that the information in this article is for information purposes only and does not constitute advice. Please refer to the particular terms & conditions of a provider before committing to any financial products.

Categories: Money, Savings & Isas

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