Savers shun ISAs as interest rates dive

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Britons struggling to pay their household bills do not have spare cash to squirrel away in Isas – the level of savings in the tax-free accounts has fallen for the first time in the tax year to 2012.

New subscriptions fell by £200m to £53.5bn, according to the accountant UHY Hacker Young. It said record low cash Isa interest rates were also putting savers off. In 2012, the average interest rate was 2.8 per cent, down from 5.1 per cent in 2008.