The 2013 Budget has underlined the ineffectiveness of cash savings, argues FS firm True Potential.

Chancellor George Osborne today confirmed the target rate on inflation would remain at two per cent, and with the government announcing it is considering extending the Funding for Lending programme, which has reduced banks’ demand for retail deposits, interest rates are likely to stay at low levels for years to come.

Mark Henderson, True Potential Investments’ senior partner, says. “Cash ISAs have been outstripped by inflation for some time and there are no signs that this is going to change – they exist only to boost the banks. It is nigh-on impossible to achieve a rate of interest on cash ISAs that won’t cause the value of an investment to diminish. They are an increasingly irrelevant product yet remain popular because people are unaware of the poor rate of return. We hope the announcements made in the Budget will help encourage investors to seek proper financial advice to help their wealth grow, not diminish.”

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