Savings rates remain under sustained pressure, with average returns continuing to lag inflation despite a wide choice of products in the market.
According to Moneyfactscompare.co.uk, the Moneyfacts Average Savings Rate (3.45%) sits below the current CPI reading of 3.8% (August), which was announced this morning by the ONS, leaving real returns in negative territory for the third consecutive month. While 976 accounts currently outpace inflation, this is a sharp fall from the 1,606 inflation-beating deals available a year ago when CPI stood at 2.2%. With even the market-leading products offering less than 1% in real terms, advisers will need to monitor both the savings market and inflation trajectory closely when assessing short-term cash strategies for clients.
Many of the top savings rates are struggling to outpace inflation, earning less than 1% in real returns, Moneyfactscompare.co.uk analysis has revealed.
Caitlyn Eastell, Spokesperson at Moneyfactscompare.co.uk, said:
“Sticky inflation will no doubt leave many savers disheartened, as the Moneyfacts Average Savings rate shows real returns remain in the negatives for the third consecutive month. Even the market-leading rates leave savers earning less than 1% in real terms, £1 saved in 2020 is now worth just £0.89. Despite this, savers can still choose from hundreds of inflation and base rate-beating deals, but they would be wise to act quickly as this number could fluctuate because of dropping rates and unpredictable inflation.
“Typically, more attractive returns are offered to savers willing to lock their cash away for longer. Depending on their specific savings goal, this may not be for everyone. With the future of further base rate cuts being uncertain some savers may be willing to risk a shorter term so they can access their money sooner. However, if savers stash away £10,000 today, in five years’ time it will have earned over £2,500, based on the top five-year fixed bond or ISA, but the same cannot be said for shorter terms, especially if rates fall further.
“Savers may be put off by the current conditions of the market but leaving their cash languishing in an account paying 3.8% or less could leave them significantly worse off so it is always worth searching for a more competitive deal.”
| Savings market analysis | ||||
| Top savings deals at £10,000 gross | 20-Sep-23 | 18-Sep-24 | 20-Aug-25 | Today |
| Easy access account | Paragon Bank – 5.05% | Ulster Bank – 5.20% | Chip – 4.74% (includes bonus) | Chip – 4.70% (includes bonus) |
| Notice account | RCI Bank UK – 5.60% (95-day) | DF Capital – 5.13% (90-day) | The Stafford BS – 4.61% (180-Day) | Earl Shilton BS – 4.50% (180-Day, includes bonus) |
| One-year fixed rate bond | National Savings & Investments – 6.20% | Mizrahi Tefahot Bank Ltd– 5.00% | JN Bank – 4.43% | Chetwood Bank – 4.45% |
| Two-year fixed rate bond | Ford Money – 6.05% | Ziraat Bank (Raisin UK) – 4.83% | JN Bank – 4.45% | Birmingham Bank – 4.44% |
| Three-year fixed rate bond | BLME – 6.00%** | UBL UK – 4.72% (payable on maturity) | JN Bank – 4.45% | Birmingham Bank – 4.46% |
| Four-year fixed rate bond | Hampshire Trust Bank – 5.85% | UBL UK – 4.54% (payable on maturity) | UBL UK – 4.54% (payable on maturity) | UBL UK – 4.54% (payable on maturity) |
| Five-year fixed rate bond | Tandem Bank – 5.85% | UBL UK – 4.64% (payable on maturity) | UBL UK – 4.64% (payable on maturity) | UBL UK – 4.64% (payable on maturity) |
| **Islamic bank, pays an expected profit rate. Inflation announcement dates. Top rates exclude deals with restrictive criteria. Notice accounts exclude those over 180 days. Source: Moneyfactscompare.co.uk | ||||
| ISA market analysis | ||||
| Top savings deals at £10,000 gross | 20-Sep-23 | 18-Sep-24 | 20-Aug-25 | Today |
| Easy access ISA | Moneybox – 4.75% | Trading 212 – 4.93% | Chip – 4.60% (includes bonus) | Plum – 4.32% (includes bonus) |
| Notice ISA | Teachers BS – 5.00% (180-day) | West Brom BS – 4.85% (60-day) | The Stafford BS – 4.35% (60 Day) | Aldermore – 4.16% (60 Day) |
| One-year fixed rate ISA | Virgin Money – 5.85% | Punjab National Bank (International) Ltd – 4.80% | Vida Savings – 4.31% | Tembo Money– 4.27% |
| Two-year fixed rate ISA | Kent Reliance – 5.79% | UBL UK – 4.51% (payable on maturity) | Shawbrook Bank – 4.21% | Vida Savings – 4.22% |
| Three-year fixed rate ISA | Secure Trust Bank – 5.60% | UBL UK – 4.50% (payable on maturity) | UBL UK – 4.37% (payable on maturity) | UBL UK – 4.37% (payable on maturity) |
| Four-year fixed rate ISA | UBL UK – 5.39% (payable on maturity) | UBL UK – 4.30% (payable on maturity) | UBL UK – 4.25% (payable on maturity) | UBL UK – 4.25% (payable on maturity) |
| Five-year fixed rate ISA | UBL UK – 5.54% (payable on maturity) | UBL UK – 4.45% (payable on maturity) | UBL UK – 4.59% (payable on maturity) | UBL UK – 4.59% (payable on maturity) |
| Inflation announcement dates. Top rates exclude deals with restrictive criteria. Notice ISAs exclude those over 180 days. Source: Moneyfactscompare.co.uk | ||||
Data note: Please note that these savings product numbers include deals that are available to UK residents (easy access accounts, notice accounts, fixed rate bonds, variable Cash ISAs and fixed Cash ISAs) and exclude regular savers, children’s savers, variable rate fixed term bonds or ISAs, JISAs and LISAs, based on a £10,000 deposit, gross rates. Higher rates may be available for other levels of deposit.
