Fixed Isa rates jump in ‘positive’ step for savers looking for guaranteed return

Isabella Galliers-Pratt, senior investment director at Rathbones, insists there are still risks despite fixed Isa rates jumping.

She said: “The return of more competitive ISA rates will be welcome news for savers.

“However, while cash plays an important role in providing security and funding short-term goals, it is not without risk.

“Inflation remains above the Bank of England’s two per cent target, meaning cash savings can still lose purchasing power over time, particularly if inflation proves more persistent due to factors such as higher energy prices.

“For those with a time horizon of five years or more, investing can offer the potential for higher, inflation-beating returns over the long term.

“The most effective financial plans tend to strike a balance between the two: cash for accessibility and peace of mind, and investments for long-term growth and wealth building.”