Signs Savings Market Is Starting To Stabilise | 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.


Derin Clark

Derin Clark

Online Reporter
Published: 17/05/2021

It has taken 14 months since the pandemic began impacting the UK economy and the Bank of England cut base rate to a historic low of 0.1%, but there are signs that the savings market is starting to stabilise.

New data, which is due to be published in the Moneyfacts UK Savings Trends Treasury Report, has found that the number of savings products, including ISAs, available to consumers has increased for the first time since October 2020 with 1,406 available in May. Despite the increase, this is still lower than the number of savings accounts and ISAs available in October 2020, when there were 1,531 savings products in the charts.

Average rates rise for first time since October 2020

The average one year and longer term fixed bond rates have increased for the first time in seven months, with the average one year fixed bond rate increasing from 0.42% to 0.44% between April and May, while the average longer term fixed bond increased from 0.65% to 0.66% during this same period. While this will likely be welcome news to savers, Rachel Springall, finance expert at Moneyfacts.co.uk, warns that “there is no guarantee rates will continue to rise”.

As well as this, the average rates available in May are still significantly lower than what was available seven months ago. Back in October 2020 the average one year fixed bond rate was 0.68%, and the average longer term fixed bond rate was 0.93%.

Today’s best paying fixed rate bonds

Provider Account Term Rate AER  
Gatehouse Bank Fixed Term Green Saver Five years 1.40% (expected profit rate) Find out more
Zopa 2 Year Fixed Term Savings Two years 0.90% Find out more
Atom Bank 1 Year Fixed Saver One year 0.85% Find out more

 

Savers will also be disappointed to see that the average easy access savings rates has remained unchanged this month and is still at a record low of 0.16%. Easy access savings accounts have been extremely popular with savers during the past 14 months, with many attracted to these accounts as they allow quick and easy access to funds. Springall added: “Savers continue to put their cash into vehicles that they can access quickly; likely linked to the uncertainty the pandemic has created and, according to the Bank of England, the flow of cash into sight deposits in March was almost £13.7bn. So far this year, there has been an inflow of almost £40bn. Despite the average easy access rate remaining stable over the month, savings providers could still make changes to cope with demand in the months to come, particularly if consumers approach the remainder of 2021 with caution and continue to put money aside as a safety net. Convenience may well be the focus regardless of the interest rates on offer.”

Best paying easy access savings accounts

Provider Account Rate AER  
Atom Bank Instant Saver 0.50% Find out more
ICICI Bank UK SuperSaver Savings Account 0.50% Find out more
Virgin Money Club M Saver 0.50% Find out more

 

“Consumers who may be feeling unsettled by low interest rates and feel apathetic to switch could still get a better deal elsewhere, so it’s important that they compare the top rate tables carefully with their own existing accounts,” continued Springall. “Even if savers have a simple easy access account with their high street bank, it could be paying as little as 0.01%. Switching is quick and straightforward to do and well worthwhile if they have a notable amount of cash built up during lockdown stashed away.”

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