Bright Spots For Savers As Rates Rise | moneyfacts.co.uk

Moneyfacts.co.uk will never contact you by phone to sell you any financial product. Any calls like this are not from Moneyfacts. Emails sent by Moneyfacts.co.uk will always be from news@moneyfacts-news.co.uk. Be Scamsmart.

Advertisement

Rachel Springall

Rachel Springall

Finance Expert & Press Officer
Published: 17/01/2022

Savers are benefiting from greater product choice and stable interest rates across the savings account market, new research shows.

The findings are revealed in the Moneyfacts UK Savings Trends Treasury Report, which shows that there are now 1,640 savings accounts (including ISAs) for consumers to choose from. This is an increase of 203 deals from this time last year.

Within this figure, the number of ISAs to choose from remains static month-on-month, however, at 388 in January 2022.

The research also found that not one average savings rate fell month-on-month, in fact, interest rates either rose or remained stable across easy access, notice, one-year fixed, longer-term fixed and ISA savings accounts.

For example, the rate on the average long-term fixed term fixed savings bond rose from 1.14% to 1.16% between December 2021 and January this year, its highest level since May 2020.

The interest paid on the average one-year fixed rate bond rose from 0.49% in January 2021 to 0.8% a year later.

The average easy access savings account pays 0.2% interest now, which is a slight improvement on the 0.18% offered in January 2021. The average notice savings account has seen its rate creep up from 0.55% to 0.57% month-on-month, and up from 0.4% this time last year.  

The average longer-term fixed rate ISA, which Moneyfacts classes as any ISA which locks your money away for more than 550 days, has gone up from 0.96% to 0.97% month-on-month in January, which is quite a significant increase from January 2021’s 0.62% average. 

Meanwhile the average rates on a one-year fixed rate ISA, a notice ISA, and an easy access ISA remained stable between December 2021 and January 2022.

These bright spots for savers come against a gloomy backdrop of multi-year record low interest rates, although the Bank of England is now gradually starting to raise the base rate with an increase from 0.1% to 0.25% in December.

Things could improve further from here, with more deals expected to come to market this year, said Rachel Springall, finance expert at Moneyfacts.co.uk.

“There is a chance the market could further expand in the months ahead - indeed, there were 145 more deals back in January 2020 before the savings market was rocked by the pandemic and subsequent base rate cuts in March 2020. In 2022, we could see more options launched to accommodate changing attitudes or needs.”

She noted that some consumers may have been caught off-guard by the financial impact of the pandemic and may now be looking to ramp up their savings with different products to suit different goals. “Notice accounts, for example, could be a promising alternative to easy access, as they now pay the highest average rate seen since June 2020,” she added.

Looking at the interest rates on offer across the savings marketplace, Springall said the moves have been “encouraging”, especially as base rate changes are not always passed on to savers.

“The stabilisation with interest rates is evident, as all average savings rates have either risen or remained unchanged month-on-month, a stark contrast to rates hitting record lows last year. As was seasonably typical, there were fewer rate changes last month, but rate rises were more common than cuts, which is encouraging to end the year.”

Disclaimer

Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time. Links to third parties on this page are paid for by the third party. You can find out more about the individual products by visiting their site. Moneyfacts.co.uk will receive a small payment if you use their services after you click through to their site. All information is subject to change without notice. Please check all terms before making any decisions. This information is intended solely to provide guidance and is not financial advice. Moneyfacts will not be liable for any loss arising from your use or reliance on this information. If you are in any doubt, Moneyfacts recommends you obtain independent financial advice.

Cookies

Moneyfacts.co.uk will, like most other websites, place cookies onto your device. This includes tracking cookies.

I accept. Read our Cookie Policy