Savings rates lag behind inflation during 2025

Caitlyn Eastell, Apprentice Press & PR Assistant

Caitlyn Eastell, Press & PR Executive 01603 476169 Email Caitlyn

Savings rates lag behind inflation during 2025

On average inflation has outpaced the average savings account this year, and savers are urged to search for the highest paying deals to avoid missing out, Moneyfactscompare.co.uk analysis can reveal.

Savings rates lag behind inflation during 2025

On average inflation has outpaced the average savings account this year, and savers are urged to search for the highest paying deals to avoid missing out, Moneyfactscompare.co.uk analysis can reveal.

Mortgages

Since the previous inflation announcement, many lenders have cut fixed rates, as a result the Moneyfacts Average Mortgage rate has fallen from 4.94% to 4.89%.
Meanwhile, the average two-year fixed rate has fallen from 4.88% to 4.82%. The average five-year fixed rate has fallen from 4.93% to 4.90%.
In December 2023 the average two-year fixed rate was 6.04%. A borrower with a ‘typical’ £250,000 loan over 25 years could expect monthly repayment of around £1,600. Borrowers remortgaging on a two-year deal now could see their repayments drop by around £180.

Caitlyn Eastell, Spokesperson at Moneyfactscompare.co.uk, said:

“Although mortgage rates remain significantly higher than the ultra-low levels seen in previous years, lenders have been drip feeding cuts as inflation eases, fuelling speculation for a base rate cut. The most recent GDP figures only add fuel to the fire. In December 2023 the average two-year fixed rate was 6.04% and the ‘typical’ borrower could expect a monthly repayment of around £1,600. Remortgage customers could now see their repayments drop by almost £180, which will ease a significant burden. However, for first-time buyers higher borrowing costs continue to limit their purchasing power.”

Mortgages

Since the previous inflation announcement, many lenders have cut fixed rates, as a result the Moneyfacts Average Mortgage rate has fallen from 4.94% to 4.89%.
Meanwhile, the average two-year fixed rate has fallen from 4.88% to 4.82%. The average five-year fixed rate has fallen from 4.93% to 4.90%.
In December 2023 the average two-year fixed rate was 6.04%. A borrower with a ‘typical’ £250,000 loan over 25 years could expect monthly repayment of around £1,600. Borrowers remortgaging on a two-year deal now could see their repayments drop by around £180.

Caitlyn Eastell, Spokesperson at Moneyfactscompare.co.uk, said:

Savings

The Consumer Price Index (CPI) fell to 3.2% during November, from 3.6% in October. The Bank of England’s projection rate for inflation during Q4 2026 is 2.5%.
The Moneyfacts Average Savings Rate currently sits at 3.39%, which is comfortably above inflation, however it remains essential that savers shop around to avoid losing money in real terms.
There are currently 1,512 savings accounts that beat inflation* (153 easy access, 145 notice accounts, 125 variable rate ISAs, 350 fixed rate ISAs and 739 fixed rate bonds).
In December 2024, there were 1,582 deals that could beat CPI which was then at 2.6% (November 2024 CPI) and in December 2023, there were 1,127 deals that could beat CPI which was at 3.9% (November 2023 CPI).

Caitlyn Eastell, Spokesperson at Moneyfactscompare.co.uk, said:

“This year inflation has averaged 4.01% and the Moneyfacts Average Savings Rate at 3.50%, meaning cash savings have failed to keep pace. For someone with £10,000, this equates to being around £50 worse off in real terms. However, the Office for Budget Responsibility (OBR) forecasts inflation will average around 2.5% in 2026 and if savings rates stayed the same savers would gain £100 in real terms.

“It’s as crucial as ever that savers now pay closer attention to how to get their money working its hardest. Inflation remains one of the biggest threats, however, fiscal drag also plays a major role. The income tax threshold freeze could haul millions of consumers into higher tax brackets and subsequently receiving a surprise tax bill as their personal savings allowance is halved from £1,000 to £500. Although the interest rates offered on cash ISAs are typically lower than their non-ISA counterparts, they may be more favourable in the long run as all interest earned is tax-free.

“Loyalty is not always incentivised, and one in four savers are missing out because they have never switched savings accounts***. The markets are most generous to those who proactively search for the highest paying deals.”

Savings

The Consumer Price Index (CPI) fell to 3.2% during November, from 3.6% in October. The Bank of England’s projection rate for inflation during Q4 2026 is 2.5%.
The Moneyfacts Average Savings Rate currently sits at 3.39%, which is comfortably above inflation, however it remains essential that savers shop around to avoid losing money in real terms.
There are currently 1,512 savings accounts that beat inflation* (153 easy access, 145 notice accounts, 125 variable rate ISAs, 350 fixed rate ISAs and 739 fixed rate bonds).
In December 2024, there were 1,582 deals that could beat CPI which was then at 2.6% (November 2024 CPI) and in December 2023, there were 1,127 deals that could beat CPI which was at 3.9% (November 2023 CPI).

Caitlyn Eastell, Spokesperson at Moneyfactscompare.co.uk, said:

Savings market analysis
Top savings deals at £10,000 gross	20-Dec-23	18-Dec-24	19-Nov-25	Today
Easy access account	Ulster Bank – 5.20%	Atom Bank – 4.75%	Sidekick – 4.43% (includes bonus)	Sidekick – 4.43% (includes bonus)
Notice account	Hampshire Trust Bank – 5.51% (95-day)	RCI Bank UK – 4.90% (95-day)	Earl Shilton BS – 4.50% (180-Day)	Earl Shilton BS – 4.50% (180-Day)
One-year fixed rate bond	Metro Bank – 5.66%	Al Rayan Bank (Raisin UK) – 4.80%**	LHV Bank – 4.46%	Kent Reliance – 4.51%
Two-year fixed rate bond	Union Bank of India (UK) Ltd –5.40%	Castle Trust Bank – 4.64%	FirstSave – 4.45%	Kent Reliance – 4.42%
Three-year fixed rate bond	Hanley Economic BS –5.35%	Hodge Bank – 4.62%	Secure Trust Bank – 4.40%	UBL UK – 4.39% (payable on maturity)
Four-year fixed rate bond	UBL UK – 4.93% (payable on maturity)	UBL UK – 4.54% (payable on maturity)	UBL UK – 4.54% (payable on maturity)	UBL UK – 4.54% (payable on maturity)
Five-year fixed rate bond	UBL UK – 5.30% (payable on maturity)	UBL UK – 4.64% (payable on maturity)	UBL UK – 4.64% (payable on maturity)	UBL UK – 4.64% (payable on maturity)
**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	20-Dec-23	18-Dec-24	19-Nov-25	Today
Easy access ISA	Metro Bank – 5.11%	Moneybox – 4.92%	Plum – 4.40% (includes bonus)	Vanquis Bank – 4.25%
Notice ISA	Mansfield BS – 5.30% (180-day)	West Brom BS – 4.60% (60-day)	Tipton & Coseley BS 4.10% - (60 Day)	Tipton & Coseley BS 4.10% - (60 Day)
One-year fixed rate ISA	Metro Bank – 5.41%	Castle Trust Bank – 4.52%	Vida Savings– 4.28%	Tembo Money – 4.30%
Two-year fixed rate ISA	UBL UK – 5.13% (payable on maturity)	Hodge Bank – 4.40%	UBL UK – 4.25% (payable on maturity)	UBL UK – 4.25% (payable on maturity)
Three-year fixed rate ISA	UBL UK – 5.11% (payable on maturity)	UBL UK – 4.55% (payable on maturity)	UBL UK – 4.29% (payable on maturity)	UBL UK – 4.29% (payable on maturity)
Four-year fixed rate ISA	UBL UK – 4.93% (payable on maturity)	UBL UK – 4.30% (payable on maturity)	UBL UK – 4.25% (payable on maturity)	UBL UK – 4.25% (payable on maturity)
Five-year fixed rate ISA	UBL UK – 5.30% (payable on maturity)	UBL UK – 4.53% (payable on maturity)	UBL UK – 4.59% (payable on maturity)	UBL UK – 4.49% (payable on maturity)
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.

***Survey of 2,000 nationally representative UK adults carried out by OnePoll on behalf of Moneyfacts between 1 - 3 September 2025.

Savings market analysis
Top savings deals at £10,000 gross	20-Dec-23	18-Dec-24	19-Nov-25	Today
Easy access account	Ulster Bank – 5.20%	Atom Bank – 4.75%	Sidekick – 4.43% (includes bonus)	Sidekick – 4.43% (includes bonus)
Notice account	Hampshire Trust Bank – 5.51% (95-day)	RCI Bank UK – 4.90% (95-day)	Earl Shilton BS – 4.50% (180-Day)	Earl Shilton BS – 4.50% (180-Day)
One-year fixed rate bond	Metro Bank – 5.66%	Al Rayan Bank (Raisin UK) – 4.80%**	LHV Bank – 4.46%	Kent Reliance – 4.51%
Two-year fixed rate bond	Union Bank of India (UK) Ltd –5.40%	Castle Trust Bank – 4.64%	FirstSave – 4.45%	Kent Reliance – 4.42%
Three-year fixed rate bond	Hanley Economic BS –5.35%	Hodge Bank – 4.62%	Secure Trust Bank – 4.40%	UBL UK – 4.39% (payable on maturity)
Four-year fixed rate bond	UBL UK – 4.93% (payable on maturity)	UBL UK – 4.54% (payable on maturity)	UBL UK – 4.54% (payable on maturity)	UBL UK – 4.54% (payable on maturity)
Five-year fixed rate bond	UBL UK – 5.30% (payable on maturity)	UBL UK – 4.64% (payable on maturity)	UBL UK – 4.64% (payable on maturity)	UBL UK – 4.64% (payable on maturity)
**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	20-Dec-23	18-Dec-24	19-Nov-25	Today
Easy access ISA	Metro Bank – 5.11%	Moneybox – 4.92%	Plum – 4.40% (includes bonus)	Vanquis Bank – 4.25%
Notice ISA	Mansfield BS – 5.30% (180-day)	West Brom BS – 4.60% (60-day)	Tipton & Coseley BS 4.10% - (60 Day)	Tipton & Coseley BS 4.10% - (60 Day)
One-year fixed rate ISA	Metro Bank – 5.41%	Castle Trust Bank – 4.52%	Vida Savings– 4.28%	Tembo Money – 4.30%
Two-year fixed rate ISA	UBL UK – 5.13% (payable on maturity)	Hodge Bank – 4.40%	UBL UK – 4.25% (payable on maturity)	UBL UK – 4.25% (payable on maturity)
Three-year fixed rate ISA	UBL UK – 5.11% (payable on maturity)	UBL UK – 4.55% (payable on maturity)	UBL UK – 4.29% (payable on maturity)	UBL UK – 4.29% (payable on maturity)
Four-year fixed rate ISA	UBL UK – 4.93% (payable on maturity)	UBL UK – 4.30% (payable on maturity)	UBL UK – 4.25% (payable on maturity)	UBL UK – 4.25% (payable on maturity)
Five-year fixed rate ISA	UBL UK – 5.30% (payable on maturity)	UBL UK – 4.53% (payable on maturity)	UBL UK – 4.59% (payable on maturity)	UBL UK – 4.49% (payable on maturity)
Inflation announcement dates. Top rates exclude deals with restrictive criteria. Notice ISAs exclude those over 180 days. Source: Moneyfactscompare.co.uk

***Survey of 2,000 nationally representative UK adults carried out by OnePoll on behalf of Moneyfacts between 1 - 3 September 2025.

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 News & Communications

01603 476154

Email Adam

Rachel Springall Press Officer / Finance Expert

01603 476210

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Caitlyn Eastell Press & PR Executive