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According to the latest Moneyfacts UK Savings Trends Treasury Report, the number of savings accounts that pay more than the Bank of England base rate has fallen by 65, resulting in the lowest percentage of accounts paying over this measure in five years.
"A month after the base rate rise, many may have assumed that the savings market would have seen a significant readjustment," commented Charlotte Nelson, finance expert at Moneyfacts. "However, this is sadly not the case, as the percentage of accounts that are paying above base rate has fallen to 68.53%, the lowest level since January 2013."
|Percentage of market paying above base rate||68%||77%||77%||69%|
While previous data has already shown that many providers are reluctant to pass on the full 0.25% increase, the fact that the percentage of the market paying above base rate has fallen by a whopping 5% in just a month reveals that many savers could be missing out. Indeed, further research shows the variable rate market has failed to recover from the base rate cut of August 2016.
"It is a sorry state of affairs that, despite two rate rises from the Bank of England, savers are still not seeing any real improvement in rates," said Charlotte. "In fact, the average easy access account has only risen by 0.04% since August 2016 and more shockingly, the average easy access ISA has fallen by 0.08% over the last two years."
|Average no notice rate||0.54%||0.58%||0.04%|
|Average no notice ISA rate||0.95%||0.87%||-0.08%|
Despite this lack of upward movement, Bank of England figures show that there is still a lot of money being put into these accounts – almost £18 billion since the start of the year. Given all the uncertainty of late, this is hardly surprising, as many savers are looking to keep at least some of their savings within reach, in case savings rates improve or they need access.
"With a substantial chunk of the easy access market paying less than base rate, it is likely a large proportion of this cash is sitting in poor-paying accounts," Charlotte warned. "[So], now is not the time for savers to rest on their laurels. In order to achieve a decent return, they must work hard and actively shop around to maximise their interest."
Savers still pinning their hopes on rates increasing in the short term may want to ensure their pots are sitting in a top-paying easy access account in the meantime, while also keeping an eye on the Best Buys in case providers decide it's time to increase rates.
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