Disappointing news for savers as most market-leading rates have fallen, and they are encouraged to urgently review their rate. Moneyfactscompare.co.uk reveals the top rate deals available to those searching for a competitive return.
· The Consumer Price Index (CPI) rose to 3.0% during January, from 2.5% in December.
· There are currently 1,516 savings accounts that beat inflation* (164 easy access, 173 notice accounts, 168 variable rate ISAs, 320 fixed rate ISAs and 691 fixed rate bonds).
· The Bank of England’s modal projection rate for inflation during Q1 2026 is 3.0%.
· In February 2024, there were 953 deals that could beat 4.0% (January 2024 CPI) and in February 2023, there were no deals that could beat 10.1% (January 2023 CPI).
Caitlyn Eastell, Spokesperson at Moneyfactscompare.co.uk, said:
“Across the board there has been an array of rate movements, with top rate reductions taking centre stage. However, they also showcased some resilience, and a few increases made an appearance. Challenger banks currently occupy all the top spots in the market as they are working hard to attract new business.
“Short-term fixed bonds continue to take a downward trajectory; savers could now be earning up to £56 less in real returns compared to this time last year. To maximise their savings consumers would be wise to carefully consider stashing away their cash for a longer term to receive a guaranteed return and outpace fixed bond rates tumbling further, but they should ensure that they are not in danger of breaching their personal savings allowance.
“Unsurprisingly, the chart-topping easy access rate has been slashed, witnessing the largest drop month-on-month by 0.19%. Comparatively, its ISA equivalent has so far won out against any cuts, holding firm at 5% gross. This may be much more enticing for savers wanting to receive real cash returns and benefit from some tax-free savings. Typically, we would also expect ISA providers to be improving their rates around this time of year in the lead-up to ISA season which could further benefit those tax-savvy savers.
“Inflation is predicted to rise to around 3.0% by Q1 2026 and if rates were to remain at their current level savers would be earning just over 1% in interest across ISAs and non-ISAs after accounting for the power of inflation. With market-leading rates falling across the board, earning a fair return may become a pressing issue, so it is key that savers review their current rate and make the switch if it is not working to its fullest potential.”
*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.
