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Only a quarter of savings accounts can beat base rate

Image of a Moneyfacts Savings Treasury Report Image of a Moneyfacts Savings Treasury Report Image of a Moneyfacts Savings Treasury Report
Rachel Springall, Press Officer
Rachel Springall, Press Officer / Finance Expert 01603 476210 Email Rachel
09/09/2025

Only a quarter of savings accounts can beat base rate

Moneyfacts UK Savings Trends Treasury Report data shows that, despite a cut to the Bank of England Base Rate (BBR) to 4%, only a quarter of savings accounts can beat it (26%). Elsewhere, variable rates continued to drop, and the choice of cash ISAs increased.

Only a quarter of savings accounts can beat base rate

Moneyfacts UK Savings Trends Treasury Report data shows that, despite a cut to the Bank of England Base Rate (BBR) to 4%, only a quarter of savings accounts can beat it (26%). Elsewhere, variable rates continued to drop, and the choice of cash ISAs increased.

  • During August, the Bank of England reduced bank base rate (BBR) by 0.25% to 4.00%, as a result, the proportion of savings accounts that can beat BBR now stands at 26%. However, due to rising inflation many savers will see their pots eroded.
  • Product choice overall rose month-on-month to 2,289 savings deals (including ISAs), a record high. The choice of cash ISAs rose to 662 deals, a new record high and its eighth monthly rise. The number of savings providers overall rose to 155, a record high.
  • The Moneyfacts Average Savings Rate fell to 3.46%, down from 3.50% month-on-month. It is down from 3.80% since September 2024, and lower than 4.29% in September 2023. The rate was last above 4% in January 2024 (4.04%).
  • The average easy access rate fell to 2.59%, its lowest level since July 2023 (2.41%). The average notice rate fell to 3.52%, its lowest level since July 2023 (3.43%). The average notice rate pays 0.93% more than the average easy access rate.
  • The average easy access ISA rate fell to 2.82%, its lowest level since July 2023 (2.54%). The average notice ISA rate fell to 3.37%, which pays 0.55% more than the average easy access ISA rate, but remains at its lowest level since July 2023 (3.25%).
  • The average one-year fixed bond rate fell to 3.96%, now at its lowest since May 2023 (3.93%). The average longer-term fixed bond rose by 0.01% to 3.89%.
  • The average one-year fixed ISA rate fell to 3.91%, its lowest level since May 2023 (3.80%). The average longer-term fixed ISA rate fell to 3.83%, it was last lower at 3.82% in July 2025.

 

  • During August, the Bank of England reduced bank base rate (BBR) by 0.25% to 4.00%, as a result, the proportion of savings accounts that can beat BBR now stands at 26%. However, due to rising inflation many savers will see their pots eroded.
  • Product choice overall rose month-on-month to 2,289 savings deals (including ISAs), a record high. The choice of cash ISAs rose to 662 deals, a new record high and its eighth monthly rise. The number of savings providers overall rose to 155, a record high.
  • The Moneyfacts Average Savings Rate fell to 3.46%, down from 3.50% month-on-month. It is down from 3.80% since September 2024, and lower than 4.29% in September 2023. The rate was last above 4% in January 2024 (4.04%).
  • The average easy access rate fell to 2.59%, its lowest level since July 2023 (2.41%). The average notice rate fell to 3.52%, its lowest level since July 2023 (3.43%). The average notice rate pays 0.93% more than the average easy access rate.
  • The average easy access ISA rate fell to 2.82%, its lowest level since July 2023 (2.54%). The average notice ISA rate fell to 3.37%, which pays 0.55% more than the average easy access ISA rate, but remains at its lowest level since July 2023 (3.25%).
  • The average one-year fixed bond rate fell to 3.96%, now at its lowest since May 2023 (3.93%). The average longer-term fixed bond rose by 0.01% to 3.89%.
  • The average one-year fixed ISA rate fell to 3.91%, its lowest level since May 2023 (3.80%). The average longer-term fixed ISA rate fell to 3.83%, it was last lower at 3.82% in July 2025.

 

Rachel Springall, Finance Expert at Moneyfacts, said:

“Savers may have assumed with the Bank of England Base Rate falling, there would be a bigger impact on the pool of deals able to beat BBR, but that’s not true. In July, only one in 10 of standard savings accounts (10%) could beat 4.25%, and with a 0.25% cut made in August, that’s only improved slightly to one in four, or 26% of all accounts paying more than 4%. This means the majority of savings accounts fail to beat BBR. As inflation is expected to climb higher, this means the vast majority of savers will see their pots eroded in real terms. This will be incredibly demoralising for savers who use their interest to supplement their income, and in fact, the situation has been dire for many years. Indeed, savers would need to cast their eyes back to the start of August 2022 to find the last time that more than half of the savings market could beat BBR, when 56% could do so, but the rate to beat was just 1.25%. The rate of inflation back then was abysmal, as it rose to double digits, so it was a terrible situation for savers.

“As may be expected, savers are casualties of base rate cuts, and over the past month we have seen variable rates tumble. The average easy access rate has dropped to 2.59%, so there will be many savers out there losing money in real terms due to inflation. Variable savings rates are now all at their lowest levels for two years (July 2023), back when base rate was 5%. Those savers who want to secure a guaranteed return on their cash may be wise to lock into a fixed bond or cash ISA. Luckily for savers the choice of cash ISAs overall continues to rise, reaching another record high. Those who have yet to utilise their ISA allowance would be wise to do so, especially if savers fear a cut to the allowance could be announced in the Budget, so savers will no doubt want to maximise their deposits in the meantime.

“Savings providers typically offer more attractive returns to savers who are prepared to lock their cash away for an agreed time, such as with a fixed rate bond or notice account, and less so for accounts where the cash could be instantly withdrawn. Amid the uncertainty surrounding the future of interest rates, savers are already showing their keenness in interest-bearing time deposits, according to the Bank of England. In fact, deposits more than trebled in the space of a month to £4.3bn during July, up from £1.2bn the month prior, and the highest monthly deposit since January 2025, of £5.8bn. Locking into a guaranteed return with a fixed bond amid tumbling variable rates is wise, but savers must be aware of their Personal Savings Allowance (PSA), which in itself, could be reviewed or abolished in the future by the Government.”

Rachel Springall, Finance Expert at Moneyfacts, said:

“Savers may have assumed with the Bank of England Base Rate falling, there would be a bigger impact on the pool of deals able to beat BBR, but that’s not true. In July, only one in 10 of standard savings accounts (10%) could beat 4.25%, and with a 0.25% cut made in August, that’s only improved slightly to one in four, or 26% of all accounts paying more than 4%. This means the majority of savings accounts fail to beat BBR. As inflation is expected to climb higher, this means the vast majority of savers will see their pots eroded in real terms. This will be incredibly demoralising for savers who use their interest to supplement their income, and in fact, the situation has been dire for many years. Indeed, savers would need to cast their eyes back to the start of August 2022 to find the last time that more than half of the savings market could beat BBR, when 56% could do so, but the rate to beat was just 1.25%. The rate of inflation back then was abysmal, as it rose to double digits, so it was a terrible situation for savers.

“As may be expected, savers are casualties of base rate cuts, and over the past month we have seen variable rates tumble. The average easy access rate has dropped to 2.59%, so there will be many savers out there losing money in real terms due to inflation. Variable savings rates are now all at their lowest levels for two years (July 2023), back when base rate was 5%. Those savers who want to secure a guaranteed return on their cash may be wise to lock into a fixed bond or cash ISA. Luckily for savers the choice of cash ISAs overall continues to rise, reaching another record high. Those who have yet to utilise their ISA allowance would be wise to do so, especially if savers fear a cut to the allowance could be announced in the Budget, so savers will no doubt want to maximise their deposits in the meantime.

“Savings providers typically offer more attractive returns to savers who are prepared to lock their cash away for an agreed time, such as with a fixed rate bond or notice account, and less so for accounts where the cash could be instantly withdrawn. Amid the uncertainty surrounding the future of interest rates, savers are already showing their keenness in interest-bearing time deposits, according to the Bank of England. In fact, deposits more than trebled in the space of a month to £4.3bn during July, up from £1.2bn the month prior, and the highest monthly deposit since January 2025, of £5.8bn. Locking into a guaranteed return with a fixed bond amid tumbling variable rates is wise, but savers must be aware of their Personal Savings Allowance (PSA), which in itself, could be reviewed or abolished in the future by the Government.”

 

Savings market analysis – average rates

 

Sep-23

Sep-24

Mar-25

Aug-25

Sep-25

Average easy access rate

2.95%

3.07%

2.84%

2.68%

2.59%

Average easy access ISA rate

3.04%

3.29%

3.02%

2.90%

2.82%

Average notice rate

4.04%

4.23%

3.84%

3.62%

3.52%

Average notice ISA rate

3.89%

4.08%

3.79%

3.49%

3.37%

Average one-year fixed rate bond

5.34%

4.43%

4.15%

3.99%

3.96%

Average longer-term fixed rate bond*

5.12%

3.99%

3.96%

3.88%

3.89%

Average one-year fixed rate ISA

5.19%

4.29%

4.07%

3.95%

3.91%

Average longer-term fixed rate ISA*

5.02%

3.92%

3.95%

3.84%

3.83%

*Longer-term fixed bonds or ISAs are those with terms over 550 days. Average interest rates based on a £5,000 deposit as at the start of the month.

Source: Moneyfacts Treasury Reports

 

Moneyfacts Average Savings Rate

 

Sep-23

Sep-24

Mar-25

Aug-25

Sep-25

Moneyfacts Average Savings Rate

4.29%

3.80%

3.65%

3.50%

3.46%

Calculated from the total of all on-sale, core market, variable and fixed rate savings accounts and Cash ISAs.  Standard exclusions apply: Regular savings, children’s accounts, LISAs and JISAs.
Source: Moneyfacts Average Savings Rate.
 

Savings market analysis – product count

 

Sep-23

Sep-24

Mar-25

Aug-25

Sep-25

Number of live savings account options (excluding ISAs)

1,421

1,447

1,548

1,626

1,627

Number of live ISA options

516

553

598

648

662

Source: Moneyfacts Treasury Reports

 

 

Savings market analysis – average rates

 

Sep-23

Sep-24

Mar-25

Aug-25

Sep-25

Average easy access rate

2.95%

3.07%

2.84%

2.68%

2.59%

Average easy access ISA rate

3.04%

3.29%

3.02%

2.90%

2.82%

Average notice rate

4.04%

4.23%

3.84%

3.62%

3.52%

Average notice ISA rate

3.89%

4.08%

3.79%

3.49%

3.37%

Average one-year fixed rate bond

5.34%

4.43%

4.15%

3.99%

3.96%

Average longer-term fixed rate bond*

5.12%

3.99%

3.96%

3.88%

3.89%

Average one-year fixed rate ISA

5.19%

4.29%

4.07%

3.95%

3.91%

Average longer-term fixed rate ISA*

5.02%

3.92%

3.95%

3.84%

3.83%

*Longer-term fixed bonds or ISAs are those with terms over 550 days. Average interest rates based on a £5,000 deposit as at the start of the month.

Source: Moneyfacts Treasury Reports

 

Moneyfacts Average Savings Rate

 

Sep-23

Sep-24

Mar-25

Aug-25

Sep-25

Moneyfacts Average Savings Rate

4.29%

3.80%

3.65%

3.50%

3.46%

Calculated from the total of all on-sale, core market, variable and fixed rate savings accounts and Cash ISAs.  Standard exclusions apply: Regular savings, children’s accounts, LISAs and JISAs.
Source: Moneyfacts Average Savings Rate.
 

Savings market analysis – product count

 

Sep-23

Sep-24

Mar-25

Aug-25

Sep-25

Number of live savings account options (excluding ISAs)

1,421

1,447

1,548

1,626

1,627

Number of live ISA options

516

553

598

648

662

Source: Moneyfacts Treasury Reports

 

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 Moneyfactsgroup.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.

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 Moneyfactsgroup.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.

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.

 

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Adam French Head of News & Communications
Rachel Springall Press Officer / Finance Expert
Caitlyn Eastell Press & PR Executive