Easy access rise = time to start an emergency fund | moneyfacts.co.uk

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Published: 12/03/2019
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We all know the importance of starting an emergency fund, yet unfortunately, it seems that not all consumers are as prepared as they should be, and many have less financial backing than they did before the financial crisis took hold. But with easy access savings rates on the rise, now could be a great time to build a buffer and ensure you're financially resilient.

Lack of preparation

According to figures from the Office for National Statistics, consumers are less prepared for financial shocks than they were in 2008, with the UK households' savings ratio – which measures total saving as a share of disposable income – having almost halved from 7% to 3.8% of household income in the last 11 years. Very few are happy with their current financial situation, either, which is understandably leading to concerns that many consumers wouldn't be able to cope should a financial emergency hit.

The latest analysis of these statistics by Moneyfacts.co.uk could well instigate a wake-up call for those who have not put aside a decent sum of cash in case of emergencies, because as our own data shows, thanks to intense competition between savings providers, there are some great easy access deals to choose from to start up a savings pot.

Easy access rate boost

The easy access market has enjoyed something of a resurgence of late, with providers actively competing for savers' cash – and rates have risen accordingly. As the table below highlights, the best easy access rates available have risen substantially in the last two years, with the top-paying standard easy access rate (based on a £1 deposit) rising by 0.49% since March 2017, while the top easy access ISA rate is up by 0.45% over the same period.

They've risen notably in the last year, too, and although they've got a long way to go before they return to the levels seen 10 years ago, it's a definite improvement.

Best savings deals

Mar 2009

Mar 2017

Mar 2018


Highest easy access interest rate

Egg – 3.35%

Virgin Money – 1.01%

Tesco Bank – 1.26%

Virgin Money – 1.50%

Highest easy access ISA interest rate

M&S Bank – 3.10%

Paragon Bank – 1.05%

Paragon Bank – 1.16%

Coventry Building Society – 1.50%

Based on a deposit of £1. Deals available to new customers and may include a bonus. Source: Moneyfacts.co.uk

"UK households have fewer savings stashed away than they did in 2008, [which] may be more attributed to the struggle to save," said Rachel Springall, finance expert at Moneyfacts.co.uk. "It is unsettling that consumers are saving very little of their household income, as this could lead to financial difficulties later down the line if their situation drastically changes.

"However, those who can start to put some cash aside will find decent easy access accounts available, such as the account from Virgin Money paying 1.50% and the best easy access ISA from Coventry Building Society that pays the same rate of 1.50%. These are 0.24% and 0.34% higher respectively than the best returns seen a year ago (based on a £1 deposit), highlighting the growing willingness of providers to compete for savers' accessible cash."

Those who are bucking the trend and already have some savings may be able to take advantage of even better deals, too. For example, the very best easy access rate available is currently on offer from Family Building Society paying 1.51%, though this requires a substantial initial deposit of £15,000. That said, those who already have this kind of buffer and are stuck in a poor-paying account would do well to compare the alternatives, as there are plenty of higher rate options available.

Time to prepare

The fact that rates are on the rise means that, whether you've got no savings or a substantial sum, now could be a great time to see what's out there – but it's particularly important for those who don't have any form of financial backup.

"Clearly, those savers who have little to no savings may want to start thinking about putting some cash aside to weather any financial storm, or they might end up caught out because of their lack of a nest egg," concluded Rachel. "Generally speaking, a savings pot equivalent to between three and six months' worth of expenses is a wise sum to have to hand to cover the essentials, and an easy access account is an ideal vehicle to choose for flexibility."


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.

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