Cash ISA interest rates have reached their highest levels since 2014, with the average account offering 0.91 per cent to savers in January 2018.
This represents a 0.55 per cent increase on the previous month’s average, and a 0.64 per cent increase on the previous quarter.
According to newly-released statistics from The Money Charity, the last time the average Cash ISA rate was this high was in May 2014, when it stood at 0.93 per cent.
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This will come as a relief to long-term savers, who have battled a combination of low interest rates and rising inflation over the past few years.
“The jump of 0.55 per cent in Cash ISA interest rates is great news for those looking for a safe return in their savings, who have been put off by low interest rates for the past few years,” said Michelle Highman, chief executive of The Money Charity.
“It is good to see that people with savings habits will be rewarded with a higher return on their ISA investments, and those without such habits now have more of an incentive to do so.
“We are interested to see how further increases in the base rate rise develop over the next year, and how it will affect savers and those in debt as well.”
The increase in Cash ISA returns is believed to be due to the rising base rate and the growing UK economy.
Meanwhile, the UK economy grew by 0.5 per cent in the last quarter of 2017 – slightly higher than expected.