The Bank of England today kept interest rates on hold, meaning that many savers will continue to see the value of their nest eggs eroded by the rising cost of living.
Members of the Bank’s Monetary Policy Committee (MPC) voted unanimously to keep the base rate at 0.75% – a level it has remained at since August 2018. Today’s decision came the day after official figures showed that inflation had accelerated, putting the squeeze on household finances.
According to the Office for National Statistics (ONS), inflation as measured by the consumer prices index (CPI) rose to 1.9% in February, up from 1.8% the previous month. Many economic forecasters had expected the CPI reading to remain unchanged.
“Rising prices for food, alcohol and tobacco, and across a range of recreational and cultural goods produced the largest upward contributions to change in the rate between January and February 2019,” said the ONS.
The MPC expects inflation to remain close to the Bank’s 2% target over the coming months, which means that money held in many savings accounts will continue to fall in value. According to personal finance data provider Moneyfacts, the best instant-access Cash ISA available pays 1.5%.
So what are your options if you want to make your money work harder?
With a LendingCrowd Growth ISA, you can earn a target return of 6%* or more a year by lending to a diverse portfolio of established British businesses. You can invest from £1,000 to £20,000 this tax year, which ends on 5 April – and you won’t have to pay tax on your returns**.
Remember, if you don’t use your full £20,000 ISA allowance by 5 April, you can’t carry any of it over into the new tax year. This really is a case of use it or lose it.
It’s easy to transfer your ISAs to us from other providers. Just open your LendingCrowd ISA account online in less than a minute and then send us your completed transfer form. We’ll take care of the rest by contacting your existing ISA manager and organising the transfer of funds.
Don’t forget – if you transfer an ISA of £5,000 or more to us by 30 April 2019, you can earn up to 3% cashback plus a £50 transfer bonus. Terms apply.
*Capital at risk. The 6% target rate is variable, net of ongoing repayment fees, estimated bad debt and before the 1% capital withdrawal fee.
**Tax treatment depends on the individual circumstances of each investor and may be subject to change in future.