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Consumers benefitting from “best ISA season in years”

Consumers are set to benefit from the best ISA season in years due to healthy competition from challenger banks nudging rates higher and Brexit playing a part in how people are treating their savings, according to a leading player in the ISA market.

Paragon Bank, which is consistently in the best buy ISA list and offering its best ISA rate in three years, highlighted that latest Bank of England public data suggests the seasonal peak in ISA balances seems more in line with those from 2016 than the past two years.

Data shows that while across January and February 2017 and 2018, ISA balances reduced, this year, there has been an increase of £670 million.

Richard Doe, Paragon Bank Managing Director, said:

This is looking like it could be the best ISA season in years because data suggests the seasonal peak might be more in line with 2016 than the past two years. This could mean £600m in extra ISA subscriptions in April from over 30,000 more people than last year.

It’s a strong market for consumers and a good opportunity for them to take advantage of that. ISA rates have nudged up, primarily because challenger banks like Paragon are setting the bar higher.

The on-going Brexit saga plays its part too as it could mean more people are keeping more wealth in cash rather than equities or other assets, where the value could be volatile in the short term. By subscribing to a cash ISA now, it means money can be switched to stocks and shares at a more stable time in the future within the ISA tax-free wrapper.

With so many offers out there, consumers should act quickly but consider carefully what works best for them in terms of restrictions in accessing their money and simple, easy accounts. We are noticing a definite trend across the market for added complexity to ISA accounts, which makes like-for-like product comparisons more difficult for customers.

Paragon Bank is offering its best ISA in three years - the Limited Edition Easy Access Cash ISA that comes with no restrictions and offers a top rate of 1.45% AER. It is available for new subscriptions and the transfer of previous subscriptions but will be available for a limited time only.

Savers are being encouraged to act quickly as the availability of limited edition products cannot be guaranteed past the traditional “ISA season”, which coincides with the first few weeks of the new tax year in April.

Known for its simple and straightforward savings products, Paragon Bank’s ISAs are available online only and eligible deposits are protected by the Financial Services Compensation Scheme up to a maximum of £85,000.

*AER stands for Annual Equivalent Rate and illustrates what the interest rate would be if interest was paid and compounded on an annual basis.

8 April 2019

All rates and statistics correct at the time of publish.

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Paragon Bank PLC is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Registered in England number 05390593. Registered office 51 Homer Road, Solihull, West Midlands B91 3QJ. Paragon Bank PLC is registered on the Financial Services Register under the firm reference number 604551