Investments  

Savers stand to lose 41% on new three-year cash Isas

Analysis from rebuildingsociety.com, the peer-to-peer lending website, found that savers will lose out on interest worth £73 in the first year alone.

That is because the average rate on a three-year cash Isa has fallen from 3.54 per cent in 2011 to 2.08 per cent today, meaning interest is now worth £104 compared to £177 three years ago.

The prospect of a torrid Isa season has reopened the debate over whether to extend the scope of stocks and shares Isas to include peer-to-peer lending. The Tax Incentivised Savings Association is leading the campaign, setting up a taskforce with the Treasury to discuss how to amend current rules.

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Advisers such as Ashley Clarke, director of Staffordshire-based Needanadviser.com, approve of efforts to open up Isas to peer-to-peer lending, arguing they are “not a million miles away from corporate bonds and sovereign debt” and offer “reasonable” returns.

Other advisers, such as Frank Cochran, managing director of West Midlands-based FSC Investments, have previously suggested that the stakes may be too high. He said: “What happens if it all goes wrong? The investor will blame us and then the Financial Ombudsman will get involved.”