Inflation eats its way into savers’ cash

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Rachel Springall, Press Officer
Rachel Springall, Press Officer / Finance Expert T: 01603 476210 E: Email Rachel
18/08/2021

Inflation eats its way into savers’ cash

Inflation continues to take its toll on savers’ cash despite a notable improvement to the top rate deals on offer, and 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 2.0% during July, from 2.5% in June.
  • The number of deals able to outpace inflation has not changed since last month, there is not one standard savings account that can outpace 2.0%.
  • The predicted rate for inflation during Q3 2022 is 3.3%.
  • In August 2020, 91 deals (one easy access account, three notice accounts, 13 fixed rate ISAs and 74 fixed rate bonds) could beat 1.0% (July CPI) and in August 2019, 58 deals (57 fixed rate bonds and one fixed rate ISA) could outpace 2.1% (July CPI).

Inflation eats its way into savers’ cash

Inflation continues to take its toll on savers’ cash despite a notable improvement to the top rate deals on offer, and 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 2.0% during July, from 2.5% in June.
  • The number of deals able to outpace inflation has not changed since last month, there is not one standard savings account that can outpace 2.0%.
  • The predicted rate for inflation during Q3 2022 is 3.3%.
  • In August 2020, 91 deals (one easy access account, three notice accounts, 13 fixed rate ISAs and 74 fixed rate bonds) could beat 1.0% (July CPI) and in August 2019, 58 deals (57 fixed rate bonds and one fixed rate ISA) could outpace 2.1% (July CPI).

Savings market analysis

Top savings deals at £10,000 gross

14-Aug-19

19-Aug-20

14-Jul-21

Today

Easy access account

Virgin Money – 1.50%

National Savings & Investments – 1.15%

ICICI Bank UK – 0.50%

Tandem Bank – 0.65%

Notice account

PCF Bank – 1.85% (180-day)

ICICI Bank UK – 1.39% (95-day)

OakNorth Bank – 0.76% (120-day)

DF Capital – 1.00% (120-day)

One-year fixed rate bond

BLME – 2.10%**

OakNorth Bank – 1.21%

Gatehouse Bank – 1.10%**

Tandem Bank – 1.31%

Two-year fixed rate bond

BLME – 2.35%**

QIB (UK) – 1.40%**

JN Bank – 1.21%

Atom Bank – 1.43%

Three-year fixed rate bond

BLME – 2.55%**

BLME– 1.40%**

UBL UK – 1.33% (payable on maturity)

Atom Bank – 1.52%

Four-year fixed rate bond

BLME – 2.45%**

BLME – 1.45%**

JN Bank – 1.45%

JN Bank – 1.55%

Five-year fixed rate bond

BLME – 2.75%**

BLME – 1.50%**

UBL UK – 1.72% (payable on maturity)

UBL UK – 1.72% (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

14-Aug-19

19-Aug-20

14-Jul-21

Today

Easy access ISA

Charter Savings Bank – 1.44%

Skipton BS – 0.95%

Marcus by Goldman Sachs® – 0.50%

Cynergy Bank – 0.65%

Notice ISA

Buckinghamshire BS – 1.50% (180-day)

Teachers BS – 0.70% (90-day)

Aldermore – 0.35% (30-day)

Aldermore – 0.35% (30-day)

One-year fixed rate ISA

Cynergy Bank – 1.61%

Coventry BS – 0.77%

OakNorth Bank – 0.72%

OakNorth Bank – 0.77%

Two-year fixed rate ISA

Al Rayan Bank – 1.80%**

Charter Savings Bank – 0.92%

OakNorth Bank – 0.86%

 Paragon Bank – 1.01 %

Three-year fixed rate ISA

State Bank of India – 1.90%

UBL UK – 1.11%

UBL UK – 1.07% (payable on maturity)

Paragon Bank – 1.11%

Four-year fixed rate ISA

Hodge Bank – 1.80%

Coventry BS – 1.15%

Hodge Bank – 0.65%

UBL UK – 1.12% (payable on maturity)

Five-year fixed rate ISA

Metro Bank – 2.10%

Coventry BS – 1.25%

UBL UK – 1.34% (payable on maturity)

UBL UK – 1.34% (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

14-Aug-19

19-Aug-20

14-Jul-21

Today

Easy access account

Virgin Money – 1.50%

National Savings & Investments – 1.15%

ICICI Bank UK – 0.50%

Tandem Bank – 0.65%

Notice account

PCF Bank – 1.85% (180-day)

ICICI Bank UK – 1.39% (95-day)

OakNorth Bank – 0.76% (120-day)

DF Capital – 1.00% (120-day)

One-year fixed rate bond

BLME – 2.10%**

OakNorth Bank – 1.21%

Gatehouse Bank – 1.10%**

Tandem Bank – 1.31%

Two-year fixed rate bond

BLME – 2.35%**

QIB (UK) – 1.40%**

JN Bank – 1.21%

Atom Bank – 1.43%

Three-year fixed rate bond

BLME – 2.55%**

BLME– 1.40%**

UBL UK – 1.33% (payable on maturity)

Atom Bank – 1.52%

Four-year fixed rate bond

BLME – 2.45%**

BLME – 1.45%**

JN Bank – 1.45%

JN Bank – 1.55%

Five-year fixed rate bond

BLME – 2.75%**

BLME – 1.50%**

UBL UK – 1.72% (payable on maturity)

UBL UK – 1.72% (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

14-Aug-19

19-Aug-20

14-Jul-21

Today

Easy access ISA

Charter Savings Bank – 1.44%

Skipton BS – 0.95%

Marcus by Goldman Sachs® – 0.50%

Cynergy Bank – 0.65%

Notice ISA

Buckinghamshire BS – 1.50% (180-day)

Teachers BS – 0.70% (90-day)

Aldermore – 0.35% (30-day)

Aldermore – 0.35% (30-day)

One-year fixed rate ISA

Cynergy Bank – 1.61%

Coventry BS – 0.77%

OakNorth Bank – 0.72%

OakNorth Bank – 0.77%

Two-year fixed rate ISA

Al Rayan Bank – 1.80%**

Charter Savings Bank – 0.92%

OakNorth Bank – 0.86%

 Paragon Bank – 1.01 %

Three-year fixed rate ISA

State Bank of India – 1.90%

UBL UK – 1.11%

UBL UK – 1.07% (payable on maturity)

Paragon Bank – 1.11%

Four-year fixed rate ISA

Hodge Bank – 1.80%

Coventry BS – 1.15%

Hodge Bank – 0.65%

UBL UK – 1.12% (payable on maturity)

Five-year fixed rate ISA

Metro Bank – 2.10%

Coventry BS – 1.25%

UBL UK – 1.34% (payable on maturity)

UBL UK – 1.34% (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:

“There has been a notable uplift to market-leading savings rates on offer since last month across various types of accounts and terms, which is positive to see. However, inflation is eating its way into savers’ hard-earned cash and with the expectation for it to rise, its eroding power will not be easing any time soon. Savers would be wise to not let this deter them from finding a more attractive rate, as deals are improving, and they may miss out on a market-leading rate if they become apathetic.

“Due to the uncertainty the pandemic caused, savers may well wish to keep their cash close to hand, such as with an easy access account. Thankfully, rates are slowly improving in this sector and the top rate today comes from Tandem Bank at 0.65%, which increased its rate last week by 0.25% and is now one of the highest easy access rates seen since the start of the year. Not only is this a market-leader for new customers, but it also supports Tandem Bank’s green lending objectives – so savers will get a decent return and be supporting ethical initiatives in the process. As a comparison, most of the high-street banks pay as little as 0.01% on easy access accounts at present, so clearly savers would be wise to consider alternative brands.

“Inflation sat at 1% a year ago and there were 91 deals that could outpace this; however, the majority of these standard savings accounts were fixed rate bonds. If savers locked into a one-year fixed bond this time a year ago and plan to get a new bond with the same term, Tandem Bank pays 1.31% on its one-year fixed bond, whereas a year ago the top deal was from OakNorth Bank at 1.21%. Challenger banks are making several improvements across the market and take market-leading positions across many different scenarios, so hopefully we will see even more improvements to rates in the weeks to come.

“To mitigate the impact of inflation, switching accounts for a more attractive return is essential and considering the more unfamiliar brands would be wise as they continue to inject competition across the savings spectrum. Signing up to rate alerts and newsletters to keep abreast of the changing top rate tables is a good idea, as savers may need to act swiftly 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:

“There has been a notable uplift to market-leading savings rates on offer since last month across various types of accounts and terms, which is positive to see. However, inflation is eating its way into savers’ hard-earned cash and with the expectation for it to rise, its eroding power will not be easing any time soon. Savers would be wise to not let this deter them from finding a more attractive rate, as deals are improving, and they may miss out on a market-leading rate if they become apathetic.

“Due to the uncertainty the pandemic caused, savers may well wish to keep their cash close to hand, such as with an easy access account. Thankfully, rates are slowly improving in this sector and the top rate today comes from Tandem Bank at 0.65%, which increased its rate last week by 0.25% and is now one of the highest easy access rates seen since the start of the year. Not only is this a market-leader for new customers, but it also supports Tandem Bank’s green lending objectives – so savers will get a decent return and be supporting ethical initiatives in the process. As a comparison, most of the high-street banks pay as little as 0.01% on easy access accounts at present, so clearly savers would be wise to consider alternative brands.

“Inflation sat at 1% a year ago and there were 91 deals that could outpace this; however, the majority of these standard savings accounts were fixed rate bonds. If savers locked into a one-year fixed bond this time a year ago and plan to get a new bond with the same term, Tandem Bank pays 1.31% on its one-year fixed bond, whereas a year ago the top deal was from OakNorth Bank at 1.21%. Challenger banks are making several improvements across the market and take market-leading positions across many different scenarios, so hopefully we will see even more improvements to rates in the weeks to come.

“To mitigate the impact of inflation, switching accounts for a more attractive return is essential and considering the more unfamiliar brands would be wise as they continue to inject competition across the savings spectrum. Signing up to rate alerts and newsletters to keep abreast of the changing top rate tables is a good idea, as savers may need to act swiftly 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, there is no commercial influence on the way Moneyfacts.co.uk ranks products, 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, there is no commercial influence on the way Moneyfacts.co.uk ranks products, 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