In a significant move for the UK savings market, LHV Bank has introduced a new easy-access account offering a headline interest rate of 4.25% AER.
A Competitive Proposition for Savers
The new LHV Easy Access savings account pays 4.17% gross (4.25% AER) on balances of up to £100,000. The bank has positioned the product as a transparent and flexible alternative in a market often complicated by temporary bonus rates and restrictive conditions. A spokesperson for LHV Bank stated the account is designed to be "genuinely rewarding" and meets a demand for simplicity combined with strong returns.
To be eligible, applicants must first hold an LHV Current Account. Potential customers must also be permanent UK residents aged 18 or over.
Context: Upcoming Changes to Cash ISA Allowances
The launch arrives against the backdrop of major changes to savings and investment rules announced in Chancellor Rachel Reeves' Autumn Budget. From April 2027, the tax-free allowance for Cash ISAs will be reduced from £20,000 to £12,000 for individuals under the age of 65.
The remaining £8,000 of the overall £20,000 ISA allowance must be placed into a Stocks and Shares ISA, a policy aimed at encouraging more investment in British businesses. Those aged 65 and over will be unaffected and retain the full £20,000 Cash ISA allowance.
Expert Clarification on the ISA Rules
MoneySavingExpert.com founder Martin Lewis has provided clarity on how the new system will work. He explained that the total ISA limit remains £20,000, but from 2027, under-65s will face a sub-limit of £12,000 for cash. "You could have £12,000 in cash, and £8,000 in shares. You don’t have to put the money in shares," Lewis said, emphasising that the rules only impact new money paid in after the change takes effect.
This regulatory shift makes competitive, non-ISA savings products like LHV Bank's new offering increasingly relevant for savers looking to grow their cash holdings beyond the soon-to-be-reduced tax-free wrapper.
