A personal finance expert has warned that falling interest rates on savings accounts may cause some savers to fall below their annual tax-free threshold.
Andrew Hagger of Moneynet.co.uk explained that falling rates of interest will have caused some savings account holders to experience financial problems .
Mr Hagger said that elderly people have suffered the worst of the financial hardship because they are reliant on their relatively meagre pension income.
He added: "Not only have these record low rates made ISA benefits barely worthwhile, and almost impossible to find a savings account that keeps pace with inflation, but it could have an impact on the tax status of savings interest."
Meanwhile, a report by the Investment Management Association has revealed that individual savings account (ISA) sales were worth £2.8 billion last year, which is the biggest sales figure since 2001.
The research contradicts the recent trend of there being higher levels of withdrawals than investments in ISAs .
Finance adviser warns of the cost of falling interest rates
Financial Services > Savings > Savings and Investments News
Finance adviser warns of the cost of falling interest rates
Wed, 03 Feb 2010
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