Caitlyn Eastell, Spokesperson at Moneyfacts, said:
“Variable rates showed some renewed strength month-on-month, with all, excluding notice ISAs, rising across the board despite no changes to base rate since August. Notably the average notice rate rose for the first time in over a year. If savers are willing to give up instant access for higher returns, notice accounts are an attractive middle ground, maintaining a degree of flexibility that easy access accounts offer without the long-term commitment of fixed bonds.
“The most competitive variable returns currently pay around 4.50%, however, with this months reduction to base rate, it may be the case that savings rates will tumble alongside it. Over the past six months, the average saver is already £12 worse off if they keep £10,000 for a year, and this will only amplify as providers pass on cuts or as they rush to meet end-of-year targets.
“Fixed rates have continued a downward trend; the average non-ISA longer-term rates are now 3.84% and the last time they were as low was over three years ago. These have been mostly impacted by falling swap rates as markets calm and the future of interest rates becomes more predictable. It would not be wholly surprising if in the coming months the top rates start dropping below the 4% benchmark.
“After a brief slump, product numbers have recovered and have reached their second highest count on record, however, a dwindling number are able to match base rate. ISAs have been a popular topic of debate over recent months which has caused competition to ramp up. With a few new market entrants, the number of ISA providers has exceeded 100 for the first time to a new record high of 101. Tax-savvy savers will have to pay close attention to their pots in the coming years as new limits and transfer rules come into play.”
Caitlyn Eastell, Spokesperson at Moneyfacts, said:
“Variable rates showed some renewed strength month-on-month, with all, excluding notice ISAs, rising across the board despite no changes to base rate since August. Notably the average notice rate rose for the first time in over a year. If savers are willing to give up instant access for higher returns, notice accounts are an attractive middle ground, maintaining a degree of flexibility that easy access accounts offer without the long-term commitment of fixed bonds.
“The most competitive variable returns currently pay around 4.50%, however, with this months reduction to base rate, it may be the case that savings rates will tumble alongside it. Over the past six months, the average saver is already £12 worse off if they keep £10,000 for a year, and this will only amplify as providers pass on cuts or as they rush to meet end-of-year targets.
“Fixed rates have continued a downward trend; the average non-ISA longer-term rates are now 3.84% and the last time they were as low was over three years ago. These have been mostly impacted by falling swap rates as markets calm and the future of interest rates becomes more predictable. It would not be wholly surprising if in the coming months the top rates start dropping below the 4% benchmark.
“After a brief slump, product numbers have recovered and have reached their second highest count on record, however, a dwindling number are able to match base rate. ISAs have been a popular topic of debate over recent months which has caused competition to ramp up. With a few new market entrants, the number of ISA providers has exceeded 100 for the first time to a new record high of 101. Tax-savvy savers will have to pay close attention to their pots in the coming years as new limits and transfer rules come into play.”
