Savers in the UK are being warned about cuts to their returns as interest rates are being slashed on over 200 savings accounts by major banks such as Barclays, HSBC, Santander, and NatWest, as well as the government-backed NS&I. These rate cuts have been implemented from the beginning of December until the beginning of January next year. Consumer rights expert Martyn James cautioned savers to be vigilant and switch to better deals if their accounts are affected, as many competitive rates are still available. The average savings rates in the UK have been declining over the past year, making it crucial for savers to ensure they are getting the best possible return on their savings.
There are different types of savings accounts available, including fixed-rate accounts, notice accounts, easy-access accounts, and regular savers. Fixed-rate accounts typically offer higher interest rates but lock in your money for a set period. Notice accounts offer slightly lower rates but allow for more flexibility in accessing your cash. Easy-access accounts provide lower returns but allow for unlimited cash withdrawals. Regular savers offer some of the best returns but require you to deposit a set amount each month. Savers are advised to review their accounts regularly to ensure they are getting the best deal, especially given the potential for further cuts to the base rate by the Bank of England.
Major banks and building societies such as Barclays, Coventry Building Society, HSBC, NatWest, Santander, Skipton Building Society, and Yorkshire Building Society have all announced cuts to their savings rates in recent weeks. These cuts affect a range of accounts, including easy access accounts, regular savers, cash ISAs, and children’s accounts. Savers are encouraged to check if their accounts are affected and consider switching to better deals offered by challenger banks, which may provide more competitive rates and the same level of protection as high street banks.
To find the best savings rates, it is advisable to use price comparison websites such as Compare the Market, Go Compare, and MoneySupermarket. These tools can help savers save time by comparing rates from different providers and finding the best deals available. Savers should consider accounts that offer higher interest rates than the current level of inflation (2%) to ensure their money is growing in real terms. It is also recommended to have some money in an easy-access savings account for emergencies and to consider locking in savings in a fixed bond for higher returns over the long term.
Some of the top savings rates currently available include Al Rayan Bank’s one-year fixed bond offering 4.8% interest, Monument Bank’s 90-day notice account offering 5.01% interest, and Atom Bank’s easy-access savings account offering 4.85% interest. For savers looking to build a saving habit, regular savings accounts such as Principality Building Society’s Six Month Regular Saver, which offers 8% interest, can be an attractive option. However, it is important to note that regular savings accounts have limitations on the amount that can be saved each month and may not be suitable for all savers with lump sum savings.
