ISA guidance issued as new fixed savings products are launched – savers plan for 2021 | Personal Finance | Finance


ISA season, the period in which savers can open and contribute to new accounts, is quickly approaching and coronavirus has completely altered how people view their savings plans. Fortunately, the pandemic has highlighted the importance of having money set aside for many and as the new tax year approaches, guidance has been issued.

Paolo di Grazia, the head of Fineco Bank UK, commented on how the pandemic has impacted savers’ plans for the year ahead: “Covid has changed the way people save.

“According to our customers, almost half plan to save more in the year ahead compared to last year.

“Customers have had more time in the last 12 months to plan, research and find the right options.

“But it is important not to get complacent. Interest rates are low and the costs of accounts matter.

READ MORE: ISA: Savers urged to watch out for ‘pitfalls’ as the deadline looms

“We would urge anyone planning to make ISA contributions in the year ahead to shop around – and find the right deals.

“This is an important part of preparations as we head towards the new tax year.”

A recent survey from Fineco found two in three savers are looking to change their ISA provider and on top of this, the following insight was also found:

  • The bank surveyed clients in early February 2021 ahead of the end of the tax year. 60 percent of respondents said they’ve modified how they save, with 53 percent planning to save more compared to last year. The same number of those surveyed – 53 percent – said they were planning to maximize their ISA contribution.
  • The data showed wide disagreement on expected performance. Almost identical amounts expect their investments returns to increase (33 percent), decrease (30 percent) and stay the same (37 percent) in the year ahead. The respondents biggest worry for the year ahead was by far was fear of investments losing money, cited by 51 percent of those who answered the survey. Loss of employment (28 percent) and living on a monthly salary (26 percent) were the next most cited choices.
  • The survey found 74 percent of people had an ISA account and two-thirds of those who did were planning to change their ISA provider this year, showing the dynamism of the market.

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Those looking for new providers or better interest rates may be in a fortunate position at the moment as banks and other financial firms are regularly launching new deals.

Most recently, DF Capital launched three new competitive fixed rate savings accounts.

Yesterday, DF Capital released details on the following new accounts:

  • 15-month fixed rate deposit at 0.65 percent AER
  • 18-month fixed rate deposit at 0.68 percent
  • Two-year fixed rate deposit at 0.76 percent

These new accounts can be opened with a minimum of £1,000 and they’ll enable savers to deposit a maximum of £85,000 across all the products.

Customers will receive interest at the end of the term.

This is the eighth tranche of products DF Capital has made since it launched its first savings account in October 2020.

The accounts are currently managed via a secure messaging system, but DF Capital assured they have plans to launch a full online banking offering in 2021.

Jonathan Biggin, DF Capital’s chief operating officer, commented on the new launch: “These products offer customers the benefit of a great interest rate and the peace of mind which comes with knowing that rate will stay the same for the length of the term.

“It’s not only our retail savings customers that benefit from our first-rate savings products, our commercial lending customers benefit too.

“The money that is deposited by our savings customers will be used to support the growth of small and medium-sized business in the UK – a vital part of the country’s economy.”

It should be noted these accounts are all currently inflation-beating, with the UKs current inflation rate sitting at 0.4 percent.

Do you have a money dilemma which you’d like a financial expert’s opinion on? If you would like to ask one of our finance experts a question, please email your query to personal.finance@reachplc.com



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