The upcoming Moneyfacts UK Savings Trends Treasury Report shows that the average variable savings rate has increased for a fifth consecutive month. This hasn't happened in almost 10 years, giving savers some hope that even variable rates are moving in the right direction.
Charlotte Nelson, finance expert at Moneyfacts, found that both notice accounts and no notice accounts have seen this welcome rise, resulting in the average easy access rate increasing to 0.62% in October – marking the first time it has reached 0.60% since April 2016.
|Average no notice rate||0.40%||0.49%||0.52%||0.62%|
|Average notice rate||0.68%||0.77%||0.84%||0.99%|
"October represented a fifth monthly increase to the non-ISA variable rates, which is the first time the Moneyfacts UK Savings Trends Treasury Report has recorded five consecutive rises to these rates since November 2009," Charlotte said. Most of this welcome movement is due to competition among the newer banks, which has "created a micro-market within the sector".
However, Charlotte went on to point out that "the fact that the average easy access rate has only increased by 0.10% since August shows that many providers have failed to pass the full rise on to their savings accounts, [as] rate improvements are to be expected after a base rate rise".
Furthermore, despite base rate now standing 0.25% higher than it was in November 2009, the averages are still lower than those recorded in 2009, as the table below shows. "Such little movement in variable rates just goes to show true lethargy that still exists among providers, with many bigger firms opting to trade off their name instead of offering savers a decent return," Charlotte said.
|Average no notice rate||0.81%||0.62%||-0.19%|
|Average notice rate||1.07%||0.99%||-0.08%|
Because of this, savers should be grateful for the competition among challenger banks, which is keeping the market active. However, as challengers are likely to drop their rates as soon as they get enough savers signed up, it's important to keep in mind that the Best Buys can change at any moment.
Whether you're looking for an easy access account (with or without bonus) or are happy to give some notice in exchange for a higher rate, the various savings Best Buys are a great place to start when looking to see who's offering the highest savings rate.
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 Any products featured may be withdrawn by their provider or changed at any time.