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Levels of interest on savings accounts reach ‘new low’

Recent data from the Bank of England has revealed that interest rates on savings accounts have plummeted to a new low.

In December, the average rate on Individual Savings Accounts (ISAs) fell to just 0.85% - this was down from a rate of 0.99% in November.

Additionally, interest on instant access account rates dipped to 0.48% in December, compared with 0.54% in November.

Research published last month by the Financial Conduct Authority (FCA) revealed that some individual banks have been paying interest of just 0.01% on savings accounts, while some are offering higher interest rates on current accounts.

Furthermore, the Bank of England’s Monetary Policy Committee is expected to vote to keep interest rates at their record low levels when it meets later this week, with recent drops in the price of oil and slower rates of pay growth set to contribute to a decision to freeze rates.