Last week, scary figures passed over my desk that show £32 billion is sitting in savings accounts earning 1 pc or less – and we hold over £10,000 in most of them.
If you are earning this awful rate, it is time to move. The big banks take your loyalty for granted and offer scant returns.
These big banks have just finished chopping rates following the last fall in base rate in August to 4 pc. They already make grim reading – and you can earn four times more interest by moving your money.
If base rate does fall again, these rates are set to get even worse. We face a cut in interest rates earlier than originally thought as inflation came in lower than expected at 3.8 pc in September.
The Bank of England is expected to hold base rate at 4 pc at its meeting on Thursday, but a rate cut in December is looking more likely. A quick glance through the easy access savings and cash Isa accounts from big banks reveals that no fewer than 25 accounts – some closed to new savers – pay 1 pc or less.
The Bank of England is expected to hold base rate at 4 pc at its meeting on Thursday, but a rate cut in December is looking more likely – so what you do with your savings now is crucial
They include Metro Bank Instant Access Savings and Instant Access Saver (0.9 pc), while all at 1 pc are Halifax Everyday Saver, Instant Saver, Instant Isa Saver, Isa Saver Variable, Lloyds Easy Saver, Standard Saver, Flexible Saver, Internet Saver, Online Saver, Cash Isa Saver, Instant Cash Isa, Bank of Scotland Access Saver, Instant Saver, Instant Access Savings, Access Cash Isa, and Isa Saver, TSB Cash Isa Saver, eSavings, and Easy Saver and Santander Everyday Saver, Instant Saver, Isa Saver along with its offshoot Cahoot Savings once you have been in its top-paying account (4.4 pc) for a year.
They are not alone. National Savings & Investments pays just 1 pc to around 1.4 million savers in its postal Investment Account, while Post Office (where the deposit taker is Bank of Ireland) pays 1 pc once you have been in its easy access account for a year.
Barclays Everyday Saver and NatWest Flexible Saver pay a tiny bit more – 1.06 pc.
Barclays also pays 1.06 pc on its Instant Cash Isa while NatWest pays as little as 1.15 pc to some cash Isa savers and 2.45 pc at best. HSBC rates are also among the worst at 1.15 pc on its Flexible Saver.
I can see why savers want to stick to well-known names. But you don’t need to worry if you make a switch to a better provider. Every provider we mention here is backed by the Financial Services Compensation Scheme. The big winners are cash Isas (an extra £2.4 billion) and easy access accounts (£6.5 billion – a third more than a year ago) while £1.5 billion came out of fixed-rate savings.
Earn 6.5 pc on your Christmas cash
Principality BS has launched a regular savings plan for you to put money aside for Christmas 2026.
You can save between £1 and £150 a month, but you don’t have to pay into the account every month.
The most you can save in its Christmas 2026 Regular Saver is £1,800 and earn a fixed 6.5 pc on the money in your account over the term. A £150-a-month saving will get you £1,863 in a year’s time.
You can’t take money out of the account during the one-year term.
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