As the Bank of England Base Rate (BBR) is expected to remain on hold later today, amid ongoing global pressures, savers are facing a mixed picture, according to the latest analysis from Moneyfactscompare.co.uk.
According to Moneyfacts, around 60% of UK savings accounts currently fail to outpace the 3.75% BBR, leaving many households at risk of seeing their money lose value in real terms.
The Moneyfacts Average Savings Rate has been on a downward trend over the past year, last exceeding 4% in January 2024. Flexible accounts are particularly exposed, while fixed-rate deals offer savers the security of guaranteed returns in uncertain times. Easy access and notice account rates are languishing below 3% and sub-4% respectively, while one- and five-year fixed bonds and ISAs remain below the 4% mark on average.
Rachel Springall, Finance Expert at Moneyfactscompare.co.uk, noted:
“Holding the Bank of England Base Rate may give savers a short respite, as providers could hold their ground until future interest rate expectations become clearer. Less than half the market can currently beat 3.75%, and many with flexible accounts are losing out in real terms. ISA season offers a temporary boost, and with only a few weeks left to utilise the 2025/26 £20,000 allowance, now is a critical time for savers to act.”
With fiscal drag and the unchanged Personal Savings Allowance meaning higher-rate taxpayers face limits on tax-free interest, Springall advises that professional guidance is increasingly important to make the most of hard-earned cash.
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