Inflation eating into savers’ cash continues

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Rachel Springall, Press Officer
Rachel Springall, Press Officer / Finance Expert T: 01603 476210 E: Email Rachel
20/10/2021

Inflation eating into savers’ cash continues

Inflation continues to outshine the positive changes within the savings market as not one standard savings account can beat its eroding power. 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) fell to 3.1% during September, from 3.2% in August.
  • The number of deals able to outpace inflation has not changed since last month. There is not one standard savings account that can outpace 3.1%*.
  • The predicted rate for inflation during Q3 2022 is 3.3%.
  • In October 2020, 444 deals (29 easy access, 44 notice accounts, 24 variable rate ISAs, 106 fixed rate ISAs and 241 fixed rate bonds) could beat 0.5% (September CPI) and in October 2019, 159 deals (140 fixed rate bonds, 12 fixed rate ISAs and seven notice accounts) could outpace 1.7% (September CPI)*.

Inflation eating into savers’ cash continues

Inflation continues to outshine the positive changes within the savings market as not one standard savings account can beat its eroding power. 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) fell to 3.1% during September, from 3.2% in August.
  • The number of deals able to outpace inflation has not changed since last month. There is not one standard savings account that can outpace 3.1%*.
  • The predicted rate for inflation during Q3 2022 is 3.3%.
  • In October 2020, 444 deals (29 easy access, 44 notice accounts, 24 variable rate ISAs, 106 fixed rate ISAs and 241 fixed rate bonds) could beat 0.5% (September CPI) and in October 2019, 159 deals (140 fixed rate bonds, 12 fixed rate ISAs and seven notice accounts) could outpace 1.7% (September CPI)*.

Savings market analysis

Top savings deals at £10,000 gross

16-Oct-19

21-Oct-20

15-Sep-21

Today

Easy access account

Coventry BS – 1.46%

Coventry BS – 0.96%***

Tandem Bank – 0.65%

Coventry BS – 0.65%

Notice account

Gatehouse Bank – 1.82% (120-day)**

DF Capital – 1.11% (90-day)

Oxbury Bank – 1.06% (120-day)

OakNorth Bank – 1.06% (120-day)

One-year fixed rate bond

Al Rayan Bank – 2.05%**

Al Rayan Bank – 1.26%**

Atom Bank – 1.50%

Gatehouse Bank – 1.51%**

Two-year fixed rate bond

Al Rayan Bank – 2.30%**

Al Rayan Bank – 1.36%**

Al Rayan Bank – 1.76%**

Al Rayan Bank – 1.76%**

Three-year fixed rate bond

Al Rayan Bank – 2.40%**

BLME – 1.45%**

Al Rayan Bank – 1.81%**

JN Bank – 1.81%

Four-year fixed rate bond

BLME – 2.20%**

BLME – 1.50%**

JN Bank – 1.74%

Gatehouse Bank – 1.92%**

Five-year fixed rate bond

UBL UK – 2.47% (on maturity)

BLME – 1.60%**

Atom Bank – 1.86%

Gatehouse Bank – 2.05%**

**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

16-Oct-19

21-Oct-20

15-Sep-21

Today

Easy access ISA

Coventry BS – 1.46%

Coventry BS – 0.96%

Cynergy Bank – 0.60%

Cynergy Bank – 0.65%

Notice ISA

Buckinghamshire BS – 1.50% (180-day)

Teachers BS – 0.70% (90-day)

Aldermore – 0.35% (30-day)

Aldermore – 0.55% (30-day)

One-year fixed rate ISA

Al Rayan Bank – 1.60%**

Newcastle BS – 0.85%

Hodge Bank – 0.90%

Castle Trust Bank – 0.90%

Two-year fixed rate ISA

Al Rayan Bank – 1.80%**

Marsden BS – 1.00%

 Secure Trust Bank – 1.15 %

West Brom BS – 1.15%

Three-year fixed rate ISA

State Bank of India – 1.90%

Gatehouse Bank – 1.12%**

Secure Trust Bank – 1.25%

West Brom BS – 1.25%

Four-year fixed rate ISA

Hodge Bank – 1.55%

Coventry BS – 1.15%

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 – 1.44% (on maturity)

UBL UK – 1.50% (payable on maturity)

UBL UK – 1.56% (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

16-Oct-19

21-Oct-20

15-Sep-21

Today

Easy access account

Coventry BS – 1.46%

Coventry BS – 0.96%***

Tandem Bank – 0.65%

Coventry BS – 0.65%

Notice account

Gatehouse Bank – 1.82% (120-day)**

DF Capital – 1.11% (90-day)

Oxbury Bank – 1.06% (120-day)

OakNorth Bank – 1.06% (120-day)

One-year fixed rate bond

Al Rayan Bank – 2.05%**

Al Rayan Bank – 1.26%**

Atom Bank – 1.50%

Gatehouse Bank – 1.51%**

Two-year fixed rate bond

Al Rayan Bank – 2.30%**

Al Rayan Bank – 1.36%**

Al Rayan Bank – 1.76%**

Al Rayan Bank – 1.76%**

Three-year fixed rate bond

Al Rayan Bank – 2.40%**

BLME – 1.45%**

Al Rayan Bank – 1.81%**

JN Bank – 1.81%

Four-year fixed rate bond

BLME – 2.20%**

BLME – 1.50%**

JN Bank – 1.74%

Gatehouse Bank – 1.92%**

Five-year fixed rate bond

UBL UK – 2.47% (on maturity)

BLME – 1.60%**

Atom Bank – 1.86%

Gatehouse Bank – 2.05%**

**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

16-Oct-19

21-Oct-20

15-Sep-21

Today

Easy access ISA

Coventry BS – 1.46%

Coventry BS – 0.96%

Cynergy Bank – 0.60%

Cynergy Bank – 0.65%

Notice ISA

Buckinghamshire BS – 1.50% (180-day)

Teachers BS – 0.70% (90-day)

Aldermore – 0.35% (30-day)

Aldermore – 0.55% (30-day)

One-year fixed rate ISA

Al Rayan Bank – 1.60%**

Newcastle BS – 0.85%

Hodge Bank – 0.90%

Castle Trust Bank – 0.90%

Two-year fixed rate ISA

Al Rayan Bank – 1.80%**

Marsden BS – 1.00%

 Secure Trust Bank – 1.15 %

West Brom BS – 1.15%

Three-year fixed rate ISA

State Bank of India – 1.90%

Gatehouse Bank – 1.12%**

Secure Trust Bank – 1.25%

West Brom BS – 1.25%

Four-year fixed rate ISA

Hodge Bank – 1.55%

Coventry BS – 1.15%

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 – 1.44% (on maturity)

UBL UK – 1.50% (payable on maturity)

UBL UK – 1.56% (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:

“Any attempt to restrain the level of inflation is unlikely to ease the erosion on standard savings accounts for some time yet due to the current interest rate environment. It would be no surprise for consumers to feel frustrated as inflation eats its way into the true spending power of their cash. Even if high inflation will be temporary, as some suggest, it shows no signs of losing its appetite as it remains above its 2% target. Despite this, savers would be wise to consider switching their account if they are receiving a poor rate of interest, as some of the top savings deals have improved since the last inflation announcement.

“Savers who are due to come off a maturing one-year bond may be pleased to see a notable spate of competition in this arena, as the best deal today pays 1.51% (Gatehouse Bank) as an expected profit rate, which is 0.25% more than last year’s top deal, of 1.26% (Al Rayan Bank) as an expected profit rate. One-year fixed ISAs, however, have not improved at such an encouraging pace, with a difference of just 0.05% between the top best deal of 0.90% today (Castle Trust Bank) and 0.85% (Newcastle Building Society) seen in October 2020. It is prudent then for savers to consider their Personal Savings Allowance along with comparing interest rates.

“Should the murmurings of a base rate rise before the year-end come to fruition, variable rate deals would typically be the first type of savings accounts to see improvements. However, there is no guarantee for rates to do so immediately and this could even take a few months to flow through, or indeed may not even be passed on in full. Savers sitting on the fence about whether to switch now or wait would be wise to keep in mind there is no certainty that interest rates on savings accounts will rise sharply leading into 2022. Indeed, for many, it was hard to imagine that interest rates could even drop to record lows this year.”

*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:

“Any attempt to restrain the level of inflation is unlikely to ease the erosion on standard savings accounts for some time yet due to the current interest rate environment. It would be no surprise for consumers to feel frustrated as inflation eats its way into the true spending power of their cash. Even if high inflation will be temporary, as some suggest, it shows no signs of losing its appetite as it remains above its 2% target. Despite this, savers would be wise to consider switching their account if they are receiving a poor rate of interest, as some of the top savings deals have improved since the last inflation announcement.

“Savers who are due to come off a maturing one-year bond may be pleased to see a notable spate of competition in this arena, as the best deal today pays 1.51% (Gatehouse Bank) as an expected profit rate, which is 0.25% more than last year’s top deal, of 1.26% (Al Rayan Bank) as an expected profit rate. One-year fixed ISAs, however, have not improved at such an encouraging pace, with a difference of just 0.05% between the top best deal of 0.90% today (Castle Trust Bank) and 0.85% (Newcastle Building Society) seen in October 2020. It is prudent then for savers to consider their Personal Savings Allowance along with comparing interest rates.

“Should the murmurings of a base rate rise before the year-end come to fruition, variable rate deals would typically be the first type of savings accounts to see improvements. However, there is no guarantee for rates to do so immediately and this could even take a few months to flow through, or indeed may not even be passed on in full. Savers sitting on the fence about whether to switch now or wait would be wise to keep in mind there is no certainty that interest rates on savings accounts will rise sharply leading into 2022. Indeed, for many, it was hard to imagine that interest rates could even drop to record lows this year.”

*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