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Blow for savers as inflation erosion intensifies

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Rachel Springall, Press Officer
Rachel Springall, Press Officer / Finance Expert T: 01603 476210 E: Email Rachel
16/02/2022

Blow for savers as inflation erosion intensifies

Savers will find a handful of top rate deals improving since last month’s inflation announcement but may be disappointed to see inflation at such a high level. As the eroding power of inflation intensifies, getting the best savings deal is crucial 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 5.5% during January, from 5.4% in December.
  • The number of deals able to outpace inflation has not changed since last month. There is not one standard savings account that can outpace 5.5%*.
  • The predicted rate for inflation during Q1 2023 is 5.2%.
  • In February 2021, 100 deals (two easy access accounts, two notice accounts, one variable rate ISA, 17 fixed rate ISAs and 78 fixed rate bonds) could beat 0.7% (January 2021 CPI) and in February 2020, 21 deals (21 fixed rate bonds) could beat 1.8% (January 2020 CPI)*.

Blow for savers as inflation erosion intensifies

Savers will find a handful of top rate deals improving since last month’s inflation announcement but may be disappointed to see inflation at such a high level. As the eroding power of inflation intensifies, getting the best savings deal is crucial 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 5.5% during January, from 5.4% in December.
  • The number of deals able to outpace inflation has not changed since last month. There is not one standard savings account that can outpace 5.5%*.
  • The predicted rate for inflation during Q1 2023 is 5.2%.
  • In February 2021, 100 deals (two easy access accounts, two notice accounts, one variable rate ISA, 17 fixed rate ISAs and 78 fixed rate bonds) could beat 0.7% (January 2021 CPI) and in February 2020, 21 deals (21 fixed rate bonds) could beat 1.8% (January 2020 CPI)*.

 

Savings market analysis

Top savings deals at £10,000 gross

19-Feb-20

17-Feb-21

19-Jan-22

Today

Easy access account

Marcus by Goldman Sachs® – 1.34%

ICICI Bank UK – 0.60%

Family Building Society – 0.72%

Cynergy Bank – 0.71%

Notice account

BLME – 1.70% (90-day)**

ICICI Bank UK – 0.85% (95-day)

Shawbrook Bank – 1.08% (120-day)

Shawbrook Bank – 1.08% (120-day)

One-year fixed rate bond

Atom Bank – 1.65%

QIB (UK) – 0.65%**

Investec Bank plc – 1.36%

Tandem Bank – 1.45%

Two-year fixed rate bond

Atom Bank – 1.80%

Gatehouse Bank – 1.10%**

Charter Savings Bank – 1.62%

Al Rayan Bank – 1.66%**

Three-year fixed rate bond

FCMB Bank (UK) – 1.90%

Gatehouse Bank – 1.25%**

Zenith Bank – 1.85%

UBL UK – 1.88% (payable on maturity)

Four-year fixed rate bond

BLME – 1.95%**

BLME – 1.05%**

Gatehouse Bank – 1.92%**

JN Bank – 1.95%

Five-year fixed rate bond

Gatehouse Bank – 2.10%**

Gatehouse Bank – 1.50%**

UBL UK – 2.14% (payable on maturity)

UBL UK – 2.19% (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

19-Feb-20

17-Feb-21

19-Jan-22

Today

Easy access ISA

Al Rayan Bank – 1.35%**

Al Rayan Bank – 0.60%**

Shawbrook Bank – 0.67%

Paragon Bank – 0.65%

Notice ISA

Paragon Bank 1.31% (120-day)

Marsden BS – 0.55% (95-day)

Aldermore – 0.55% (30-day)

Aldermore – 0.55% (30-day)

One-year fixed rate ISA

OakNorth Bank– 1.41%

Al Rayan Bank – 0.65%**

Coventry BS – 1.00%

Coventry BS – 1.05%

Two-year fixed rate ISA

Al Rayan Bank – 1.50%**

Gatehouse Bank – 0.80%**

Newcastle BS – 1.30%

UBL UK – 1.37% (payable on maturity)

Three-year fixed rate ISA

Virgin Money – 1.55%

Gatehouse Bank – 0.90%**

UBL UK – 1.43% (payable on maturity)

Coventry BS – 1.45%

Four-year fixed rate ISA

Hodge Bank – 1.55%

Hodge Bank – 0.65%

UBL UK – 1.54% (payable on maturity)

UBL UK – 1.54% (payable on maturity)

Five-year fixed rate ISA

Cambridge BS – 1.70%

Gatehouse Bank – 1.30%**

UBL UK – 1.82% (payable on maturity)

UBL UK – 1.82% (payable on maturity)

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

 

 

Savings market analysis

Top savings deals at £10,000 gross

19-Feb-20

17-Feb-21

19-Jan-22

Today

Easy access account

Marcus by Goldman Sachs® – 1.34%

ICICI Bank UK – 0.60%

Family Building Society – 0.72%

Cynergy Bank – 0.71%

Notice account

BLME – 1.70% (90-day)**

ICICI Bank UK – 0.85% (95-day)

Shawbrook Bank – 1.08% (120-day)

Shawbrook Bank – 1.08% (120-day)

One-year fixed rate bond

Atom Bank – 1.65%

QIB (UK) – 0.65%**

Investec Bank plc – 1.36%

Tandem Bank – 1.45%

Two-year fixed rate bond

Atom Bank – 1.80%

Gatehouse Bank – 1.10%**

Charter Savings Bank – 1.62%

Al Rayan Bank – 1.66%**

Three-year fixed rate bond

FCMB Bank (UK) – 1.90%

Gatehouse Bank – 1.25%**

Zenith Bank – 1.85%

UBL UK – 1.88% (payable on maturity)

Four-year fixed rate bond

BLME – 1.95%**

BLME – 1.05%**

Gatehouse Bank – 1.92%**

JN Bank – 1.95%

Five-year fixed rate bond

Gatehouse Bank – 2.10%**

Gatehouse Bank – 1.50%**

UBL UK – 2.14% (payable on maturity)

UBL UK – 2.19% (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

19-Feb-20

17-Feb-21

19-Jan-22

Today

Easy access ISA

Al Rayan Bank – 1.35%**

Al Rayan Bank – 0.60%**

Shawbrook Bank – 0.67%

Paragon Bank – 0.65%

Notice ISA

Paragon Bank 1.31% (120-day)

Marsden BS – 0.55% (95-day)

Aldermore – 0.55% (30-day)

Aldermore – 0.55% (30-day)

One-year fixed rate ISA

OakNorth Bank– 1.41%

Al Rayan Bank – 0.65%**

Coventry BS – 1.00%

Coventry BS – 1.05%

Two-year fixed rate ISA

Al Rayan Bank – 1.50%**

Gatehouse Bank – 0.80%**

Newcastle BS – 1.30%

UBL UK – 1.37% (payable on maturity)

Three-year fixed rate ISA

Virgin Money – 1.55%

Gatehouse Bank – 0.90%**

UBL UK – 1.43% (payable on maturity)

Coventry BS – 1.45%

Four-year fixed rate ISA

Hodge Bank – 1.55%

Hodge Bank – 0.65%

UBL UK – 1.54% (payable on maturity)

UBL UK – 1.54% (payable on maturity)

Five-year fixed rate ISA

Cambridge BS – 1.70%

Gatehouse Bank – 1.30%**

UBL UK – 1.82% (payable on maturity)

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 have been dealt another blow this month as inflation rises once more and is unbeatable with any standard savings account. Despite a slight uplift to some of the top savings rates since last month’s inflation announcement, rising inflation is not allowing any respite. While the Bank of England predicts such a level to be temporary, even the Government target of 2% cannot be beaten unless savers lock into a five-year fixed bond.

“There are still savers out there waiting for the December 2021 base rate rise to be passed onto them, let alone the most recent uplift of 0.25% a couple of weeks ago. Those savers with the patience to wait may wish to reconsider their loyalty, particularly as they will not find a high-street bank featured in the top rate tables. Challenger banks and building societies dominate the top of the market both for variable and fixed rate deals, including ISAs. Sadly, those savers who are adamant to use their ISA allowance will find a gap between rates offered on ISAs versus those outside of tax-free wrapper, even taking to account some new market-leaders this month. If savers are assessing bonds and ISAs, then it’s vital they consider their Personal Savings Allowance foremost.

“Those savers who prefer to have their cash close to hand in an easy access account or easy access ISA may have noticed a few prominent deals surface in recent weeks, but some have already been pulled or cut. Aldermore had a market-leading 0.75% easy access account (Double Access Account) which was around for just a week and Cynergy Bank opened its Online ISA to new customers but also cut its rate down from 0.65% to 0.60%. As it stands, Cynergy Bank and Investec Bank plc both lead the easy access market at 0.71% (Online Easy Access Account and Online Flexi Saver), and Paragon Bank launched a new easy access ISA (Triple Access Cash ISA) paying 0.65% last week which leads its sector. However, as we have seen before with challenger banks, the highest rates can get taken up very quickly. Savers would therefore be wise to act quickly or may be left disappointed. 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 exclude 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.

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

“Savers have been dealt another blow this month as inflation rises once more and is unbeatable with any standard savings account. Despite a slight uplift to some of the top savings rates since last month’s inflation announcement, rising inflation is not allowing any respite. While the Bank of England predicts such a level to be temporary, even the Government target of 2% cannot be beaten unless savers lock into a five-year fixed bond.

“There are still savers out there waiting for the December 2021 base rate rise to be passed onto them, let alone the most recent uplift of 0.25% a couple of weeks ago. Those savers with the patience to wait may wish to reconsider their loyalty, particularly as they will not find a high-street bank featured in the top rate tables. Challenger banks and building societies dominate the top of the market both for variable and fixed rate deals, including ISAs. Sadly, those savers who are adamant to use their ISA allowance will find a gap between rates offered on ISAs versus those outside of tax-free wrapper, even taking to account some new market-leaders this month. If savers are assessing bonds and ISAs, then it’s vital they consider their Personal Savings Allowance foremost.

“Those savers who prefer to have their cash close to hand in an easy access account or easy access ISA may have noticed a few prominent deals surface in recent weeks, but some have already been pulled or cut. Aldermore had a market-leading 0.75% easy access account (Double Access Account) which was around for just a week and Cynergy Bank opened its Online ISA to new customers but also cut its rate down from 0.65% to 0.60%. As it stands, Cynergy Bank and Investec Bank plc both lead the easy access market at 0.71% (Online Easy Access Account and Online Flexi Saver), and Paragon Bank launched a new easy access ISA (Triple Access Cash ISA) paying 0.65% last week which leads its sector. However, as we have seen before with challenger banks, the highest rates can get taken up very quickly. Savers would therefore be wise to act quickly or may be left disappointed. 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 exclude 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.

Notes to editors

Pioneering financial comparison technology for over 30 years.

Moneyfacts Group plc is the UK’s leading provider of retail financial product data. Used by virtually every bank and building society in the UK, and supplied to the Bank of England, Financial Conduct Authority, Financial Ombudsman Service, HM Treasury, Prudential Regulatory Authority and UK Finance.

Our expert research team monitors the thousands of mortgages, savings, credit card, personal loan, business banking, life, pension and investment products in the UK.

Moneyfacts.co.uk is a financial product price comparison site, launched in 2000, which helps consumers compare thousands of financial products, including credit cards, savings, mortgages and many more. Unlike other comparison sites, Moneyfacts.co.uk shows whole of market data regardless of commercial bias, showing consumers a true picture of the best products based on the criteria they select.

We hope you find this press release insightful. We would appreciate a link back to Moneyfacts.co.uk if you decide to source this information.

For more information about us please see our key facts.

Broadcast

Our broadcast suite enables our finance experts to appear in-vision for television, and we regularly comment live on national and regional radio.

To arrange an interview for radio or television, please contact our press department. We have an in-house broadcast room.

 

Notes to editors

Pioneering financial comparison technology for over 30 years.

Moneyfacts Group plc is the UK’s leading provider of retail financial product data. Used by virtually every bank and building society in the UK, and supplied to the Bank of England, Financial Conduct Authority, Financial Ombudsman Service, HM Treasury, Prudential Regulatory Authority and UK Finance.

Our expert research team monitors the thousands of mortgages, savings, credit card, personal loan, business banking, life, pension and investment products in the UK.

Moneyfacts.co.uk is a financial product price comparison site, launched in 2000, which helps consumers compare thousands of financial products, including credit cards, savings, mortgages and many more. Unlike other comparison sites, Moneyfacts.co.uk shows whole of market data regardless of commercial bias, showing consumers a true picture of the best products based on the criteria they select.

We hope you find this press release insightful. We would appreciate a link back to Moneyfacts.co.uk if you decide to source this information.

For more information about us please see our key facts.

Broadcast

Our broadcast suite enables our finance experts to appear in-vision for television, and we regularly comment live on national and regional radio.

To arrange an interview for radio or television, please contact our press department. We have an in-house broadcast room.

 

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Rachel Springall Press Officer / Finance Expert
Eleanor Williams Press Officer / Finance Expert