Inflation continues to take its toll on savers’ cash

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Rachel Springall, Press Officer
Rachel Springall, Press Officer / Finance Expert T: 01603 476210 E: Email Rachel
17/11/2021

Inflation continues to take its toll on savers’ cash

The savings market has seen some top rate accounts improving since last month, but not on shorter-term fixed bonds. However, inflation continues to take its toll on the true spending power of savers’ cash. 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 4.2% during October, from 3.1% in September.
  • The number of deals able to outpace inflation has not changed since last month. There is not one standard savings account that can outpace 4.2%*.
  • The predicted rate for inflation during Q4 2022 is 3.4%.
  • In November 2020, 227 deals (seven easy access, 17 notice accounts, four variable rate ISAs, 38 fixed rate ISAs and 161 fixed rate bonds) could beat 0.7% (October CPI) and in November 2019, 224 deals (168 fixed rate bonds, 40 fixed rate ISAs and 16 notice accounts) could outpace 1.5% (October CPI)*.

Inflation continues to take its toll on savers’ cash

The savings market has seen some top rate accounts improving since last month, but not on shorter-term fixed bonds. However, inflation continues to take its toll on the true spending power of savers’ cash. 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 4.2% during October, from 3.1% in September.
  • The number of deals able to outpace inflation has not changed since last month. There is not one standard savings account that can outpace 4.2%*.
  • The predicted rate for inflation during Q4 2022 is 3.4%.
  • In November 2020, 227 deals (seven easy access, 17 notice accounts, four variable rate ISAs, 38 fixed rate ISAs and 161 fixed rate bonds) could beat 0.7% (October CPI) and in November 2019, 224 deals (168 fixed rate bonds, 40 fixed rate ISAs and 16 notice accounts) could outpace 1.5% (October CPI)*.

Savings market analysis

Top savings deals at £10,000 gross

13-Nov-19

18-Nov-20

20-Oct-21

Today

Easy access account

Coventry BS – 1.46%

ICICI Bank UK – 0.75%***

Coventry BS – 0.65%

Shawbrook Bank – 0.67%

Notice account

Gatehouse Bank – 1.82% (120-day)**

UBL UK – 1.00% (35-day)

OakNorth Bank – 1.06% (120-day)

Secure Trust Bank – 1.10% (120-day)

One-year fixed rate bond

Gatehouse Bank – 1.85%**

Al Rayan Bank – 1.08%**

Gatehouse Bank – 1.51%**

Union Bank of India (UK) Ltd – 1.35%

Two-year fixed rate bond

Al Rayan Bank – 2.15%**

Al Rayan Bank – 1.25%**

Al Rayan Bank – 1.76%**

Gatehouse Bank – 1.60%**

Three-year fixed rate bond

Al Rayan Bank – 2.30%**

Al Rayan Bank – 1.41%**

JN Bank – 1.81%

UBL UK – 1.85%

Four-year fixed rate bond

BLME – 2.10%**

BLME – 1.30%**

Gatehouse Bank – 1.92%**

Gatehouse Bank – 1.92%**

Five-year fixed rate bond

UBL UK – 2.47% (on maturity)

BLME – 1.50%**

Gatehouse Bank – 2.05%**

UBL UK – 2.14%

**Islamic bank, pays an expected profit rate. ***NS&I excluded from top rate position as rates were due to be cut. Inflation announcement dates. Source: Moneyfacts.co.uk

 

ISA market analysis

Top savings deals at £10,000 gross

13-Nov-19

18-Nov-20

20-Oct-21

Today

Easy access ISA

Virgin Money – 1.36%

Paragon Bank – 0.65%

Cynergy Bank – 0.65%

Shawbrook Bank – 0.67%

Notice ISA

Aldermore – 1.30% (30-day)

Teachers BS – 0.70% (90-day)

Aldermore – 0.55% (30-day)

Aldermore – 0.55% (30-day)

One-year fixed rate ISA

Al Rayan Bank – 1.60%**

Virgin Money – 1.00%

Castle Trust Bank – 0.90%

West Brom BS – 1.00%

Two-year fixed rate ISA

Al Rayan Bank – 1.80%**

Newcastle BS – 0.80%

West Brom BS – 1.15 %

West Brom BS – 1.25%

Three-year fixed rate ISA

Hinckley & Rugby BS – 1.76%

Coventry BS – 0.85%

West Brom BS – 1.25%

West Brom BS – 1.50%

Four-year fixed rate ISA

Hodge Bank – 1.55%

Hodge Bank – 0.75%

UBL UK – 1.38% (payable on maturity)

UBL UK – 1.38% (payable on maturity)

Five-year fixed rate ISA

UBL UK – 2.09% (on maturity)

UBL UK – 1.18% (on maturity)

UBL UK – 1.56% (payable on maturity)

West Brom BS – 2.00%

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

Savings market analysis

Top savings deals at £10,000 gross

13-Nov-19

18-Nov-20

20-Oct-21

Today

Easy access account

Coventry BS – 1.46%

ICICI Bank UK – 0.75%***

Coventry BS – 0.65%

Shawbrook Bank – 0.67%

Notice account

Gatehouse Bank – 1.82% (120-day)**

UBL UK – 1.00% (35-day)

OakNorth Bank – 1.06% (120-day)

Secure Trust Bank – 1.10% (120-day)

One-year fixed rate bond

Gatehouse Bank – 1.85%**

Al Rayan Bank – 1.08%**

Gatehouse Bank – 1.51%**

Union Bank of India (UK) Ltd – 1.35%

Two-year fixed rate bond

Al Rayan Bank – 2.15%**

Al Rayan Bank – 1.25%**

Al Rayan Bank – 1.76%**

Gatehouse Bank – 1.60%**

Three-year fixed rate bond

Al Rayan Bank – 2.30%**

Al Rayan Bank – 1.41%**

JN Bank – 1.81%

UBL UK – 1.85%

Four-year fixed rate bond

BLME – 2.10%**

BLME – 1.30%**

Gatehouse Bank – 1.92%**

Gatehouse Bank – 1.92%**

Five-year fixed rate bond

UBL UK – 2.47% (on maturity)

BLME – 1.50%**

Gatehouse Bank – 2.05%**

UBL UK – 2.14%

**Islamic bank, pays an expected profit rate. ***NS&I excluded from top rate position as rates were due to be cut. Inflation announcement dates. Source: Moneyfacts.co.uk

 

ISA market analysis

Top savings deals at £10,000 gross

13-Nov-19

18-Nov-20

20-Oct-21

Today

Easy access ISA

Virgin Money – 1.36%

Paragon Bank – 0.65%

Cynergy Bank – 0.65%

Shawbrook Bank – 0.67%

Notice ISA

Aldermore – 1.30% (30-day)

Teachers BS – 0.70% (90-day)

Aldermore – 0.55% (30-day)

Aldermore – 0.55% (30-day)

One-year fixed rate ISA

Al Rayan Bank – 1.60%**

Virgin Money – 1.00%

Castle Trust Bank – 0.90%

West Brom BS – 1.00%

Two-year fixed rate ISA

Al Rayan Bank – 1.80%**

Newcastle BS – 0.80%

West Brom BS – 1.15 %

West Brom BS – 1.25%

Three-year fixed rate ISA

Hinckley & Rugby BS – 1.76%

Coventry BS – 0.85%

West Brom BS – 1.25%

West Brom BS – 1.50%

Four-year fixed rate ISA

Hodge Bank – 1.55%

Hodge Bank – 0.75%

UBL UK – 1.38% (payable on maturity)

UBL UK – 1.38% (payable on maturity)

Five-year fixed rate ISA

UBL UK – 2.09% (on maturity)

UBL UK – 1.18% (on maturity)

UBL UK – 1.56% (payable on maturity)

West Brom BS – 2.00%

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

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

“Inflation erosion on the true spending power of consumers’ cash persists and any attempts to ease the strain is unlikely to ease the frustration of savers in a low interest rate environment. As the rate of inflation remains above its target of 2%, consumers would be wise to review the rate on any existing savings account and consider switching to a better deal due to recent improvements to the top rate tables.

“Easy access accounts remain a firm favourite among savers due to their flexibility and rates have improved since last month, but the top rate today still pays less than the best rate offered a year ago. However, it is the fixed bond market which has shown more notable improvements to rates compared to a year ago and savers can now get a better rate on a one-year bond than they could have secured on a two-year bond last November. Fixed rate ISAs have also improved this month but there remains a notable difference in rate compared to fixed bonds. If savers are comparing bonds and ISAs, then it’s vital they consider their Personal Savings Allowance as fixed bonds pay higher rates.

“Interest rates on savings accounts on average dropped to record lows this year so the continued improvements to the top cash savings rates is positive, but in real terms inflation is still taking its toll even on the best rates. The murmurings of a base rate rise could mean a further uplift to interest rates, but savers would be wise not to wait around for this to come to fruition. Competition among challenger banks and building societies is evident in the top rate tables and savers would be wise to act with pace to take advantage.”

*Data note: Please note that these savings product numbers only include deals that are available to UK residents (no notice/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 larger deposits.

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

“Inflation erosion on the true spending power of consumers’ cash persists and any attempts to ease the strain is unlikely to ease the frustration of savers in a low interest rate environment. As the rate of inflation remains above its target of 2%, consumers would be wise to review the rate on any existing savings account and consider switching to a better deal due to recent improvements to the top rate tables.

“Easy access accounts remain a firm favourite among savers due to their flexibility and rates have improved since last month, but the top rate today still pays less than the best rate offered a year ago. However, it is the fixed bond market which has shown more notable improvements to rates compared to a year ago and savers can now get a better rate on a one-year bond than they could have secured on a two-year bond last November. Fixed rate ISAs have also improved this month but there remains a notable difference in rate compared to fixed bonds. If savers are comparing bonds and ISAs, then it’s vital they consider their Personal Savings Allowance as fixed bonds pay higher rates.

“Interest rates on savings accounts on average dropped to record lows this year so the continued improvements to the top cash savings rates is positive, but in real terms inflation is still taking its toll even on the best rates. The murmurings of a base rate rise could mean a further uplift to interest rates, but savers would be wise not to wait around for this to come to fruition. Competition among challenger banks and building societies is evident in the top rate tables and savers would be wise to act with pace to take advantage.”

*Data note: Please note that these savings product numbers only include deals that are available to UK residents (no notice/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 larger deposits.

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.

 

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.

 

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