Savers who have managed to squirrel away their annual cash Isa allowance since the accounts launched in 1999 will be sitting on a nest egg of £50,280, excluding interest.
The top rate today for those looking to use their £5,640 2012-13 cash Isa allowance comes from Coventry Building society at 2.8 per cent, which includes a 0.6 per cent bonus for 12 months. However, you have to give 60 days’ notice to make a withdrawal and the account doesn’t allow transfers in of other cash Isa savings.
In fact, only three of the top-paying variable cash Isas will allow you to transfer money in, as opposed to nine out of ten two years ago, according to Moneyfacts.
Sylvia Waycot, editor of the price comparison site, said: “The silent withdrawal of transferable Isas may mean that savers need to rethink how they view Isas. Whilst this current trend remains, savers need to find an Isa that not only pays a great rate but also from a provider that they are comfortable doing business with for longer than 12 months, lest they become Isa prisoners for life.”
Remember that although cash savings are useful if you need the money in the short-term, over the longer-term inflation will erode the value of cash. Against this backdrop, many savers are stepping up the risk scale and turning to high-yielding equities to generate an income from their capital.