Inflation wipes out £1,400 in real-term losses

Caitlyn Eastell, Apprentice Press & PR Assistant

Caitlyn Eastell, Personal Finance Analyst 01603 476169 Email Caitlyn

Inflation wipes out £1,400 in real-term losses

Over the past five years stubborn inflation has eroded savers’ pots by around £1,400, and they could face a similar fate in future if price pressures continue, Moneyfactscompare.co.uk analysis can reveal.

Inflation wipes out £1,400 in real-term losses

Mortgages

Since the previous inflation announcement, the Moneyfacts Average Mortgage rate has fallen from 5.71% to 5.64%.
Meanwhile, the average two-year fixed rate has fallen from 5.83% to 5.73%. The average five-year fixed rate has fallen from 5.73% to 5.66%.
Borrowers remortgaging off an ultra-low five-year fixed rate face a £5,400-plus yearly increase on a typical £250,000 mortgage over 25 years.

Caitlyn Eastell, Personal Finance Analyst at Moneyfactscompare.co.uk, said:

“The mortgage market remains highly reactive to ongoing shocks, and swap rates have continued to spike following escalating tensions in the Middle East and the uncertainty around the UK’s political landscape. Interest rates remaining higher for longer will quickly burden borrowers, squeezing their budgets and how much they can afford. Millions of households are due to remortgage, but those coming off an ultra-low five-year fixed rate should be prepared to see their repayments spike by more than £5,400 a year. First-time buyers may wish to choose a longer mortgage term as it can help with affordability pressures, however, it also means they may end up paying significantly more interest. Tracker mortgages can look competitive on price, but they leave borrowers more exposed to volatility, as any change in the Bank of England Base rate is directly passed through to monthly repayments. It’s crucial that borrowers seek advice to ensure they get the best possible deal to suit their needs.”

Mortgages

Since the previous inflation announcement, the Moneyfacts Average Mortgage rate has fallen from 5.71% to 5.64%.
Meanwhile, the average two-year fixed rate has fallen from 5.83% to 5.73%. The average five-year fixed rate has fallen from 5.73% to 5.66%.
Borrowers remortgaging off an ultra-low five-year fixed rate face a £5,400-plus yearly increase on a typical £250,000 mortgage over 25 years.

Caitlyn Eastell, Personal Finance Analyst at Moneyfactscompare.co.uk, said:

Savings

The Consumer Price Index (CPI) fell to 2.8% during April, from 3.3% in March.
The Moneyfacts Average Savings Rate currently sits at 3.55%, which is higher than inflation, meaning savers can get real returns on their cash but it’s still important to shop around for the best rates.
There are currently 1,806 savings accounts that beat inflation* (202 easy access, 178 notice accounts, 180 variable rate ISAs, 410 fixed rate ISAs and 836 fixed rate bonds).
In May 2025, there were 1,326 deals that could beat CPI which was then at 3.5% (April 2025 CPI) and in May 2024, there were 1,558 deals that could beat CPI which was at 2.3% (April 2024 CPI).

Caitlyn Eastell, Personal Finance Analyst at Moneyfactscompare.co.uk, said:

“Locking in savings rates has not shielded households from inflation, and savers who locked into a five-year term in May 2021 at a top rate of 1.40% may have exposed themselves to significant real-term losses. During that time, a £10,000 deposit would now be worth around a modest £10,700, however, with average inflation at around 4.6% per year, its purchasing power would’ve been drastically eroded. In today’s terms, the real value of the investment falls to around £8,600, equating to a real-term loss of around £1,400 over five years.

“While savings rates now sit far higher than in the ultra-low era, and as the top rates are moving in a positive direction, it remains crucial for savers to focus on true value instead of attractive headline rates. The Bank of England’s worst-case scenario projects inflation to reach 5.6% in Q2 of 2027. This runs the risk that even with today’s higher savings rates, returns may still lag if price shocks persist. To avoid the same fate of inflation-battered returns, savers need to take a more proactive approach by reviewing deals frequently, making use of their tax-free cash ISA wrappers and avoiding apathy with long standing accounts that pay below average returns.”

Savings

The Consumer Price Index (CPI) fell to 2.8% during April, from 3.3% in March.
The Moneyfacts Average Savings Rate currently sits at 3.55%, which is higher than inflation, meaning savers can get real returns on their cash but it’s still important to shop around for the best rates.
There are currently 1,806 savings accounts that beat inflation* (202 easy access, 178 notice accounts, 180 variable rate ISAs, 410 fixed rate ISAs and 836 fixed rate bonds).
In May 2025, there were 1,326 deals that could beat CPI which was then at 3.5% (April 2025 CPI) and in May 2024, there were 1,558 deals that could beat CPI which was at 2.3% (April 2024 CPI).

Caitlyn Eastell, Personal Finance Analyst at Moneyfactscompare.co.uk, said:

Savings market analysis
Top savings deals at £10,000 gross	22-May-24	21-May-25	22-Apr-26	Today
Easy access account	Ulster Bank – 5.20%	Chip – 4.67% (includes bonus)	Tembo Money – 4.71% (includes bonus)	Tembo Money – 4.71% (includes bonus)
Notice account	DF Capital – 5.35%	Vida Savings – 4.65% (95-Day)	The Stafford BS – 4.26% (180-Day)	Bank of London and the Middle East – 4.37%** (90-Day)
One-year fixed rate bond	Habib Bank Zurich plc** – 5.21%	Castle Trust Bank – 4.44%	MBNA – 4.66% (payable on maturity)	MBNA – 4.75% (payable on maturity)
Two-year fixed rate bond	DF Capital – 5.07%	Secure Trust Bank – 4.42%	RCI Bank UK – 4.65%	Hampshire Trust Bank – 4.76%
Three-year fixed rate bond	Shawbrook Bank – 4.71%	Birmingham Bank – 4.43% (payable on maturity)	RCI Bank UK – 4.60%	Oxbury Bank – 4.76%
Four-year fixed rate bond	Isbank (Raisin UK) – 4.50%	UBL UK – 4.54% (payable on maturity)	thisbank – 4.57%	Oxbury Bank – 4.58%
Five-year fixed rate bond	Shawbrook Bank – 4.57%	UBL UK – 4.64% (payable on maturity)	Close Brothers Savings – 4.67%	Close Brothers Savings – 4.80%
**Islamic bank, pays an expected profit rate. Inflation announcement dates. Top rates exclude deals with restrictive criteria. Notice accounts exclude those over 180 days. Source: Moneyfactscompare.co.uk

ISA market analysis
Top savings deals at £10,000 gross	22-May-24	21-May-25	22-Apr-26	Today
Easy access ISA	Plum – 5.06%	Moneybox – 5.71% (includes bonus)	Plum – 4.27% (includes bonus)	Plum – 4.46% (includes bonus)
Notice ISA	West Brom BS – 5.10% (60-day)	Tipton & Coseley BS – 4.50% (60-day)	Aldermore 4.15% - (60 Day)	Aldermore 4.15% - (60 Day)
One-year fixed rate ISA	Virgin Money – 5.05%	Virgin Money – 4.27%	Investec Save – 4.52% (payable on maturity)	UBL UK – 4.66% (payable on maturity)
Two-year fixed rate ISA	State Bank of India – 4.65%	UBL UK – 4.19% (payable on maturity)	Santander – 4.50%	Tandem Bank – 4.71%
Three-year fixed rate ISA	Shawbrook Bank – 4.41%	Ford Money – 4.20%	Close Brothers Savings – 4.53%	Castle Trust Bank– 4.62%
Four-year fixed rate ISA	UBL UK – 4.30% (payable on maturity)	United Trust Bank – 4.00%	UBL UK – 4.15% (payable on maturity)	UBL UK – 4.15% (payable on maturity)
Five-year fixed rate ISA	UBL UK – 4.42% (payable on maturity)	UBL UK – 4.46% (payable on maturity)	UBL UK – 4.57% (payable on maturity)	Close Brothers Savings – 4.66%
Inflation announcement dates. Top rates exclude deals with restrictive criteria. Notice ISAs exclude those over 180 days. Source: Moneyfactscompare.co.uk

Data note: Please note that these savings product numbers include deals that are available to UK residents (easy access accounts, notice accounts, fixed rate bonds, variable Cash ISAs and fixed Cash ISAs) and exclude regular savers, children’s savers, variable rate fixed term bonds or ISAs, JISAs and LISAs, based on a £10,000 deposit, gross rates. Higher rates may be available for other levels of deposit.

Savings market analysis
Top savings deals at £10,000 gross	22-May-24	21-May-25	22-Apr-26	Today
Easy access account	Ulster Bank – 5.20%	Chip – 4.67% (includes bonus)	Tembo Money – 4.71% (includes bonus)	Tembo Money – 4.71% (includes bonus)
Notice account	DF Capital – 5.35%	Vida Savings – 4.65% (95-Day)	The Stafford BS – 4.26% (180-Day)	Bank of London and the Middle East – 4.37%** (90-Day)
One-year fixed rate bond	Habib Bank Zurich plc** – 5.21%	Castle Trust Bank – 4.44%	MBNA – 4.66% (payable on maturity)	MBNA – 4.75% (payable on maturity)
Two-year fixed rate bond	DF Capital – 5.07%	Secure Trust Bank – 4.42%	RCI Bank UK – 4.65%	Hampshire Trust Bank – 4.76%
Three-year fixed rate bond	Shawbrook Bank – 4.71%	Birmingham Bank – 4.43% (payable on maturity)	RCI Bank UK – 4.60%	Oxbury Bank – 4.76%
Four-year fixed rate bond	Isbank (Raisin UK) – 4.50%	UBL UK – 4.54% (payable on maturity)	thisbank – 4.57%	Oxbury Bank – 4.58%
Five-year fixed rate bond	Shawbrook Bank – 4.57%	UBL UK – 4.64% (payable on maturity)	Close Brothers Savings – 4.67%	Close Brothers Savings – 4.80%
**Islamic bank, pays an expected profit rate. Inflation announcement dates. Top rates exclude deals with restrictive criteria. Notice accounts exclude those over 180 days. Source: Moneyfactscompare.co.uk

ISA market analysis
Top savings deals at £10,000 gross	22-May-24	21-May-25	22-Apr-26	Today
Easy access ISA	Plum – 5.06%	Moneybox – 5.71% (includes bonus)	Plum – 4.27% (includes bonus)	Plum – 4.46% (includes bonus)
Notice ISA	West Brom BS – 5.10% (60-day)	Tipton & Coseley BS – 4.50% (60-day)	Aldermore 4.15% - (60 Day)	Aldermore 4.15% - (60 Day)
One-year fixed rate ISA	Virgin Money – 5.05%	Virgin Money – 4.27%	Investec Save – 4.52% (payable on maturity)	UBL UK – 4.66% (payable on maturity)
Two-year fixed rate ISA	State Bank of India – 4.65%	UBL UK – 4.19% (payable on maturity)	Santander – 4.50%	Tandem Bank – 4.71%
Three-year fixed rate ISA	Shawbrook Bank – 4.41%	Ford Money – 4.20%	Close Brothers Savings – 4.53%	Castle Trust Bank– 4.62%
Four-year fixed rate ISA	UBL UK – 4.30% (payable on maturity)	United Trust Bank – 4.00%	UBL UK – 4.15% (payable on maturity)	UBL UK – 4.15% (payable on maturity)
Five-year fixed rate ISA	UBL UK – 4.42% (payable on maturity)	UBL UK – 4.46% (payable on maturity)	UBL UK – 4.57% (payable on maturity)	Close Brothers Savings – 4.66%
Inflation announcement dates. Top rates exclude deals with restrictive criteria. Notice ISAs exclude those over 180 days. Source: Moneyfactscompare.co.uk

Notes to editors

You are welcome to use part or all of this press release, so long as we are sufficiently sourced. We would appreciate a link back to Moneyfactscompare.co.uk.

Pioneering financial comparison technology for over 35 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, banking, life, pension and investment products in the UK.

Moneyfactscompare.co.uk is the financial product price comparison site, launched as Moneyfacts.co.uk in 2000 and rebranded to Moneyfactscompare.co.uk in 2023, which helps consumers compare thousands of financial products, including credit cards, savings, mortgages and many more. Unlike other comparison sites, Moneyfactscompare.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.

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

You are welcome to use part or all of this press release, so long as we are sufficiently sourced. We would appreciate a link back to Moneyfactscompare.co.uk.

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

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.

If you're looking for extra comment, a chart or more information, then please give us a call. We are always more than happy to help.

Adam French Head of Consumer Finance

01603 476154

Email Adam

Rachel Springall Finance Expert

01603 476210

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Caitlyn Eastell Personal Finance Analyst