Savings choice reaches highest level since March 2020

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Rachel Springall, Press Officer
Rachel Springall, Press Officer / Finance Expert T: 01603 476210 E: Email Rachel
18/10/2021

Savings choice reaches highest level since March 2020

Savings choice reaches highest level since March 2020

Moneyfacts UK Savings Trends Treasury Report data reveals the number of savings accounts on the market has grown to its highest level seen since the UK lockdown in 2020, and is the biggest month-on-month rise since May 2021.

 

Moneyfacts UK Savings Trends Treasury Report data reveals the number of savings accounts on the market has grown to its highest level seen since the UK lockdown in 2020, and is the biggest month-on-month rise since May 2021.

 

  • Product choice rose for the sixth consecutive month and there are now 1,639 savings deals (including ISAs) on the market (a rise of 66 month-on-month) – the highest count seen since March 2020, when there were 1,768 deals.
  • ISA product choice improved for a sixth consecutive month. There are now 380 deals, the highest seen since March 2020 when it was 417.
  • The average longer-term fixed bond rate has surpassed 1% for the first time since June 2020. All average fixed bond and fixed ISA rates rose month-on-month for the fourth consecutive month. The differential rate between the average one-year fixed bond and ISA now stands at 0.23%, which is the biggest margin since September 2012.
  • After a dip last month to 0.17%, the average easy access rate rose to 0.18% this month and the average notice rate rose for the sixth month running, now 0.54%, its highest point since July 2020 when it was also 0.54%.
  • The average no notice ISA rate rose slightly to 0.25% but the notice ISA rate remained unchanged, at a record low of 0.31%.
  • Product choice rose for the sixth consecutive month and there are now 1,639 savings deals (including ISAs) on the market (a rise of 66 month-on-month) – the highest count seen since March 2020, when there were 1,768 deals.
  • ISA product choice improved for a sixth consecutive month. There are now 380 deals, the highest seen since March 2020 when it was 417.
  • The average longer-term fixed bond rate has surpassed 1% for the first time since June 2020. All average fixed bond and fixed ISA rates rose month-on-month for the fourth consecutive month. The differential rate between the average one-year fixed bond and ISA now stands at 0.23%, which is the biggest margin since September 2012.
  • After a dip last month to 0.17%, the average easy access rate rose to 0.18% this month and the average notice rate rose for the sixth month running, now 0.54%, its highest point since July 2020 when it was also 0.54%.
  • The average no notice ISA rate rose slightly to 0.25% but the notice ISA rate remained unchanged, at a record low of 0.31%.

Savings market analysis – average rates

 

Oct-19

Oct-20

Sep-21

Oct-21

Average easy access rate

0.64%

0.23%

0.17%

0.18%

Average easy access ISA rate

0.91%

0.35%

0.24%

0.25%

Average notice rate

1.06%

0.53%

0.47%

0.54%

Average notice ISA rate

1.16%

0.54%

0.31%

0.31%

Average one-year fixed rate bond

1.29%

0.68%

0.67%

0.76%

Average longer-term fixed rate bond*

1.59%

0.93%

0.94%

1.03%

Average one-year fixed rate ISA

1.23%

0.62%

0.49%

0.53%

Average longer-term fixed rate ISA*

1.41%

0.85%

0.79%

0.83%

*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

 

 

Savings market analysis – product count

 

Oct-19

Oct-20

Sep-21

Oct-21

Number of live savings account options (excluding ISAs)

1,448

1,158

1,210

1,259

Number of live ISA options

405

373

363

380

Source: Moneyfacts Treasury Reports

Savings market analysis – average rates

 

Oct-19

Oct-20

Sep-21

Oct-21

Average easy access rate

0.64%

0.23%

0.17%

0.18%

Average easy access ISA rate

0.91%

0.35%

0.24%

0.25%

Average notice rate

1.06%

0.53%

0.47%

0.54%

Average notice ISA rate

1.16%

0.54%

0.31%

0.31%

Average one-year fixed rate bond

1.29%

0.68%

0.67%

0.76%

Average longer-term fixed rate bond*

1.59%

0.93%

0.94%

1.03%

Average one-year fixed rate ISA

1.23%

0.62%

0.49%

0.53%

Average longer-term fixed rate ISA*

1.41%

0.85%

0.79%

0.83%

*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

 

 

Savings market analysis – product count

 

Oct-19

Oct-20

Sep-21

Oct-21

Number of live savings account options (excluding ISAs)

1,448

1,158

1,210

1,259

Number of live ISA options

405

373

363

380

Source: Moneyfacts Treasury Reports

Rachel Springall, Finance Expert at Moneyfacts, said:

“The growth in product choice for savers has reached a milestone, as the market’s steady recovery has led to volumes reaching the highest point not seen since before the UK lockdown and Bank of England base rate cuts in March 2020. The past six consecutive months of product choice growth has been fuelled mostly by a rise in fixed bond and notice account options, and rates have also improved in these areas. Savings providers have been attentive with pricing fixed bonds, and the average longer-term bond has now surpassed 1% for the first time since June 2020.

“A notable uplift was seen in the one-year fixed bond arena, where the average rate rose by 0.09% month-on-month, the biggest rise since April 2011. Standing at 0.76%, it is the highest rate since last June. Savers looking to lock their cash away for a year may also be considering an ISA to take advantage of their tax-free wrapper, but the same uplift to rate has not emerged. Indeed, we have recorded the biggest margin between the one-year fixed bond and ISA average since September 2012, so savers will receive 0.23% less from a one-year fixed ISA than a fixed bond equivalent on average. Since the start of April 2021, the average one-year fixed bond rate has improved by 0.34%, compared to the ISA equivalent which has risen by just 0.17%, half the level of recovery of the bond rate.

“Savers considering their options in light of the interest rate rises on fixed bonds may well be moving their cash around to take advantage. According to the Bank of England, during August there was an outflow of £213 million from cash ISAs, bringing the total outflow so far during 2021 to £2.6 billion. However, those who desire flexibility with their cash continue to pour into easy access accounts, where an inflow into sight deposits of almost £9 billion occurred, which is just over £80 billion so far during 2021. Such flexibility does come at cost in interest earned however, as unlike other savings vehicles which have improved, after minor dips and rises this year the average easy access rate currently stands at 0.18%, matching that seen in January. Considering this, picking the right savings account for any circumstance is vital, and a re-think may be in order on how often someone needs access to their cash to acquire a more competitive rate of interest.”

Rachel Springall, Finance Expert at Moneyfacts, said:

“The growth in product choice for savers has reached a milestone, as the market’s steady recovery has led to volumes reaching the highest point not seen since before the UK lockdown and Bank of England base rate cuts in March 2020. The past six consecutive months of product choice growth has been fuelled mostly by a rise in fixed bond and notice account options, and rates have also improved in these areas. Savings providers have been attentive with pricing fixed bonds, and the average longer-term bond has now surpassed 1% for the first time since June 2020.

“A notable uplift was seen in the one-year fixed bond arena, where the average rate rose by 0.09% month-on-month, the biggest rise since April 2011. Standing at 0.76%, it is the highest rate since last June. Savers looking to lock their cash away for a year may also be considering an ISA to take advantage of their tax-free wrapper, but the same uplift to rate has not emerged. Indeed, we have recorded the biggest margin between the one-year fixed bond and ISA average since September 2012, so savers will receive 0.23% less from a one-year fixed ISA than a fixed bond equivalent on average. Since the start of April 2021, the average one-year fixed bond rate has improved by 0.34%, compared to the ISA equivalent which has risen by just 0.17%, half the level of recovery of the bond rate.

“Savers considering their options in light of the interest rate rises on fixed bonds may well be moving their cash around to take advantage. According to the Bank of England, during August there was an outflow of £213 million from cash ISAs, bringing the total outflow so far during 2021 to £2.6 billion. However, those who desire flexibility with their cash continue to pour into easy access accounts, where an inflow into sight deposits of almost £9 billion occurred, which is just over £80 billion so far during 2021. Such flexibility does come at cost in interest earned however, as unlike other savings vehicles which have improved, after minor dips and rises this year the average easy access rate currently stands at 0.18%, matching that seen in January. Considering this, picking the right savings account for any circumstance is vital, and a re-think may be in order on how often someone needs access to their cash to acquire a more competitive rate of interest.”

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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 is the UK's leading independent provider of finance product data. For over 30 years Moneyfacts' information has been a key driver behind personal finance product decisions.

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 with ISDN (01603 230551) and Skype (Moneyfacts).

 

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 is the UK's leading independent provider of finance product data. For over 30 years Moneyfacts' information has been a key driver behind personal finance product decisions.

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 with ISDN (01603 230551) and Skype (Moneyfacts).

 

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Rachel Springall Press Officer / Finance Expert
Eleanor Williams Press Officer / Finance Expert