Leeds Building Society has announced the launch of a five-year Escalator ISA offering investors 2.75 per cent above the base rate.

The ISA pays a tax-free AER of 3.25 per cent over the period. Investors will receive 2.75 per cent in the first year and three, 3.25 and 3.75 per cent in each subsequent year.

Kim Rebecchi, director of sales and marketing, said, ‘It is very rare that investors can lock into a rate that is so much higher than Bank base rate. And if, as expected, base rate falls further next week, the relative rate of return will be even better.

‘Furthermore, at a time when many savers have seen their income slashed, there is a monthly income option paying 3.03 per cent AER. Both the annual and monthly income accounts also allow an unlimited number of withdrawals of up to 25 per cent of the initial amount invested, without notice or penalty, providing additional flexibility and peace of mind.’

For more information, customers can call into their local branch, visit the website at www.leedsbuildingsociety.co.uk or call the savings hotline on 08450 540 995.