- Shawbrook data shows 1-year fixed ISA accounts have increased 59% FY 21 to FY 22
- Over 10,000 1-year fixes were opened in October 2022
- With the new ISA year underway, savers should make the most of the current savings’ opportunity says Shawbrook
Savers are increasingly looking for flexibility from their savings product over the long term, according to new data from Shawbrook, as rate rises prompt more to switch.
Shawbrook’s internal data found that among the banks’ cash ISA products, easy-access, one-year fixed, and 18-month fixed accounts were overwhelmingly the most popular amongst savers opening a new account or switching in 2022.
Indeed, the number of savers saving into a Shawbrook 1-year fixed rate cash ISA rose by 59% in 2022 compared to the previous year. Shawbrook’s 18-month fixed rate cash ISA also saw an influx of savers, with new accounts rising by 15% from 2021 to 20221.
In comparison, demand for products such as three, five and seven-year fixed rate accounts has slowed. With savings rates remaining stagnant over recent years, many savers are now looking for the flexibility to be able to switch as increased choice and improved rates come onto the market in line with Bank of England interest rate increases. For example, Shawbrook saw the biggest influx of new accounts in October 2022 following the first 0.5bps rise from the Bank of England. Over 10,000 1-year fixed rate accounts were opened that month, equating to over a 1400% increase from the previous month.
Adam Thrower, Head of Savings, comments: “There seems to be a slight whack-a-mole trend going on with savings, as peoples’ preference for shorter term products has increased in a more competitive market– it’s great to see some energy return after years of rock-bottom rates and inertia.
“With the new ISA year now open, savers should review where their money is sitting right now. At current average rates, savers with over £14,0852 in the top easy-access savings account will exceed their personal savings allowance*, so for people with larger savings pots, ISA products could be attractive as they can benefit from tax-free interest payments on annual deposits up to £20,000.”
