Savers Urged To Switch As High Inflation Persists | moneyfacts.co.uk

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Rachel Springall

Rachel Springall

Finance Expert & Press Officer
Published: 19/01/2022

Savers comparing deals have been urged to act swiftly to take advantage of top rates, with some changing since last month’s inflation announcement. As high inflation persists, getting the best savings deal is essential to soften its eroding impact. The latest analysis from Moneyfacts.co.uk reveals the top rate deals available to savers searching for a competitive return.

  • The Consumer Price Index (CPI) rose to 5.4% during December, from 5.1% in November.
  • The number of deals able to outpace inflation has not changed since last month. There is not one standard savings account that can outpace 5.4%*.
  • The predicted rate for inflation during Q4 2022 is 3.4%.
  • In January 2021, 157 deals (two easy access accounts, eight notice accounts, two variable rate ISAs, 34 fixed rate ISAs and 111 fixed rate bonds) could beat 0.6% (December CPI) and in January 2020, 331 deals (210 fixed rate bonds, 79 fixed rate ISAs, five variable rate ISAs, 29 notice accounts and eight easy access accounts) could beat 1.3% (December CPI)*.

 

Savings market analysis

Top savings deals at £10,000 gross

15-Jan-20 20-Jan-21 15-Dec-21 Today
Easy access account

Gatehouse Bank – 1.40%**

ICICI Bank UK – 0.60%

Investec Bank plc – 0.71%

Family Building Society – 0.72%

Notice account

BLME – 1.70% (90-day)**

ICICI Bank UK – 0.85% (95-day)

Secure Trust Bank – 1.10% (120-day)

Shawbrook Bank – 1.08% (120-day)

One-year fixed rate bond

BLME – 1.80%**

QIB (UK) – 0.80%**

Gatehouse Bank – 1.41%**

Investec Bank plc – 1.36%

Two-year fixed rate bond

BLME – 1.95%**

Gatehouse Bank – 1.10%**

Gatehouse Bank – 1.60%**

Charter Savings Bank – 1.62%

Three-year fixed rate bond

BLME – 2.10%**

Gatehouse Bank – 1.25%**

UBL UK – 1.85% (payable on maturity)

Zenith Bank – 1.85%

Four-year fixed rate bond

BLME – 2.10%**

BLME – 1.05%**

Gatehouse Bank – 1.92%**

Gatehouse Bank – 1.92%**

Five-year fixed rate bond

UBL UK – 2.50% (payable on maturity)

Gatehouse Bank – 1.50%**

UBL UK – 2.14% (payable on maturity)

UBL UK – 2.14% (payable on maturity)

**Islamic bank, pays an expected profit rate. Inflation announcement dates. Source: Moneyfacts.co.uk

 

ISA market analysis

Top savings deals at £10,000 gross

15-Jan-20 20-Jan-21 15-Dec-21 Today
Easy access ISA

Al Rayan Bank – 1.35%**

Al Rayan Bank – 0.60%**

Shawbrook Bank – 0.67%

Shawbrook Bank – 0.67%

Notice ISA

Paragon Bank 1.31% (120-day)

Aldermore – 0.55% (30-day)

Aldermore – 0.55% (30-day)

Aldermore – 0.55% (30-day)

One-year fixed rate ISA

Charter Savings Bank – 1.41%

Al Rayan Bank – 0.65%**

Shawbrook Bank – 0.93%

Coventry BS – 1.00%

Two-year fixed rate ISA

Metro Bank – 1.60%

Gatehouse Bank – 0.80%**

West Brom BS – 1.20%

Newcastle BS – 1.30%

Three-year fixed rate ISA

Marsden BS – 1.70%

Gatehouse Bank – 0.90%**

West Brom BS – 1.40%

UBL UK – 1.43% (payable on maturity)

Four-year fixed rate ISA

Secure Trust Bank – 1.80%

Hodge Bank – 0.65%

UBL UK – 1.39% (payable on maturity)

UBL UK – 1.54% (payable on maturity)

Five-year fixed rate ISA

UBL UK – 2.11% (on maturity)

Gatehouse Bank – 1.30%**

West Brom BS – 1.75%

UBL UK – 1.82% (payable on maturity)

**Islamic bank, pays an expected profit rate. Inflation announcement dates. Source: Moneyfacts.co.uk

 

Rachel Springall, Finance Expert at Moneyfacts.co.uk, said:

“Savers will see inflation continuing to eat its way into their cash deposits and it is expected to remain high over the spring, according to the Bank of England, before falling back towards the Government’s desired 2% target. However, consumers may note from the latest top savings rates, they would need to lock their money away for five years to beat 2%. As interest rates and inflation were particularly volatile in 2021, it would be understandable if many savers feel uncomfortable committing to a lengthy fixed term. Instead, savers would be wise to ensure they are getting the best possible return on their cash savings account that suits their needs and switch if they are getting a poor deal.

“Savers who are looking to utilise their ISA allowance or indeed find a new home for their existing pot will be pleased to see some improvements to top rates since the last inflation announcement. Coventry Building Society currently pays the best ISA rate over one year, Newcastle Building Society has the best over two years and UBL UK has the best over three, four and five-year fixed terms. However, on fixed bonds outside of an ISA wrapper, higher returns can be found. The top one-year bond now pays 1.36% from Investec Bank plc, compared to 1.00% as interest for the ISA equivalent from Coventry Building Society. If savers are comparing bonds and ISAs, then it’s imperative they consider their Personal Savings Allowance foremost.

“Top savings rates do not always last on the shelf for long, so savers would need to be quick to take advantage. As an example, the top easy access deal last month came from Investec Bank Plc at 0.71%, but was withdrawn after a few weeks and the market-leading one-year bond from Gatehouse Bank last week was withdrawn this week. As the Bank of England increased base rate to 0.25% last month, we may see some improvement to variable rates but, as we have seen before, it can take a few months for savers to benefit from the rise and is not guaranteed. Comparing and switching deals is therefore crucial for consumers to get the best return on their cash, and signing up to newsletters and checking top rate tables regularly is wise to keep up with changes.”

*Data note: Please note that these savings product numbers only include deals that are available to UK residents (easy access, notice, fixed rate bonds, variable or fixed ISAs) and excludes regular savers and children’s savers (this figure does not count each interest payment option for each account), based on a £10,000 deposit. Higher rates may be available for other levels of deposit.

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.

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