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Savings market stabilises as product choice returns

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Rachel Springall, Press Officer
Rachel Springall, Press Officer / Finance Expert T: 01603 476210 E: Email Rachel
17/01/2022

Savings market stabilises as product choice returns

Savings market stabilises as product choice returns

Moneyfacts UK Savings Trends Treasury Report data reveals that the steady growth of product choice and improved rates has established stabilisation within the savings market.

Moneyfacts UK Savings Trends Treasury Report data reveals that the steady growth of product choice and improved rates has established stabilisation within the savings market.

  • Product choice overall has grown by 203 deals year-on-year, to 1,640 savings deals (including ISAs).
  • Not one average savings rate fell month-on-month, rates either rose or remained stable (averages included are easy access, notice, one-year fixed, longer-term fixed and the ISA equivalents).
  • The average long-term fixed bond rate rose to 1.16%, the highest since May 2020 (1.18%). The average one-year bond rate remained unchanged but stands at its highest since June 2020 (0.86%).
  • The longer-term fixed ISA rate rose month-on-month to 0.97%, its highest since May 2020 (1.07%). The one-year fixed ISA rate remained unchanged and is at its highest since November 2020 (0.58%).
  • The average easy access rate rose to 0.20%, its highest since November 2020 (0.22%) and the average notice rate rose to 0.57%, its highest since June 2020 (0.69%). Both the easy access and notice ISA rates remained unchanged month-on-month for the second month running, but are at their highest since December 2020 (0.27%) and February 2021 (0.40%) respectively.
  • Product choice overall has grown by 203 deals year-on-year, to 1,640 savings deals (including ISAs).
  • Not one average savings rate fell month-on-month, rates either rose or remained stable (averages included are easy access, notice, one-year fixed, longer-term fixed and the ISA equivalents).
  • The average long-term fixed bond rate rose to 1.16%, the highest since May 2020 (1.18%). The average one-year bond rate remained unchanged but stands at its highest since June 2020 (0.86%).
  • The longer-term fixed ISA rate rose month-on-month to 0.97%, its highest since May 2020 (1.07%). The one-year fixed ISA rate remained unchanged and is at its highest since November 2020 (0.58%).
  • The average easy access rate rose to 0.20%, its highest since November 2020 (0.22%) and the average notice rate rose to 0.57%, its highest since June 2020 (0.69%). Both the easy access and notice ISA rates remained unchanged month-on-month for the second month running, but are at their highest since December 2020 (0.27%) and February 2021 (0.40%) respectively.
Savings Treasury Report Savings Treasury Report Savings Treasury Report

Savings market analysis – average rates

 

Jan-20

Jan-21

Dec-21

Jan-22

Average easy access rate

0.59%

0.18%

0.19%

0.20%

Average easy access ISA rate

0.85%

0.25%

0.26%

0.26%

Average notice rate

1.03%

0.40%

0.55%

0.57%

Average notice ISA rate

1.12%

0.44%

0.37%

0.37%

Average one-year fixed rate bond

1.20%

0.49%

0.80%

0.80%

Average longer-term fixed rate bond*

1.48%

0.70%

1.14%

1.16%

Average one-year fixed rate ISA

1.15%

0.47%

0.57%

0.57%

Average longer-term fixed rate ISA*

1.37%

0.62%

0.96%

0.97%

*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

 

Jan-20

Jan-21

Dec-21

Jan-22

Number of live savings account options (excluding ISAs)

1,388

1,100

1,258

1,252

Number of live ISA options

397

337

388

388

Source: Moneyfacts Treasury Reports

Savings market analysis – average rates

 

Jan-20

Jan-21

Dec-21

Jan-22

Average easy access rate

0.59%

0.18%

0.19%

0.20%

Average easy access ISA rate

0.85%

0.25%

0.26%

0.26%

Average notice rate

1.03%

0.40%

0.55%

0.57%

Average notice ISA rate

1.12%

0.44%

0.37%

0.37%

Average one-year fixed rate bond

1.20%

0.49%

0.80%

0.80%

Average longer-term fixed rate bond*

1.48%

0.70%

1.14%

1.16%

Average one-year fixed rate ISA

1.15%

0.47%

0.57%

0.57%

Average longer-term fixed rate ISA*

1.37%

0.62%

0.96%

0.97%

*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

 

Jan-20

Jan-21

Dec-21

Jan-22

Number of live savings account options (excluding ISAs)

1,388

1,100

1,258

1,252

Number of live ISA options

397

337

388

388

Source: Moneyfacts Treasury Reports

Rachel Springall, Finance Expert at Moneyfacts, said:

“Savings choice rose year-on-year as there are now 203 more savings deals available for cash investors, however, there is a chance the market could further expand in the months ahead. Indeed, there were 145 more deals back in January 2020 before the savings market was rocked by the pandemic and subsequent base rate cuts in March 2020. In 2022 we could see more options launched to accommodate changing attitudes or needs. Those caught off guard by the pandemic’s influence on their financial resilience could well seek different types of accounts to suit different goals this year. Notice accounts, for example, could be a promising alternative to easy access, as they now pay the highest average rate seen since June 2020.

“The stabilisation with interest rates is evident, as all average savings rates have either risen or remained unchanged month-on-month, a stark contrast to rates hitting record lows last year. As was seasonably typical, there were fewer rate changes last month, but rate rises were more common than cuts, which is encouraging to end the year. The Bank of England’s decision to increase base rate has yet to make a significant impact to variable savings rates and, as we have seen before, this could take a few months to filter through. As was inevitable, the proportion of savings deals to beat base rate fell month-on-month, as base rose to 0.25%. However, there is no guarantee savers will see the 0.15% rise passed on, so it’s important they review their rate regularly.

“Longer-term fixed bond and ISA rates rose and stand at their highest levels since 2020, but one-year fixed bond and ISA rates remained unchanged month-on-month. Regardless, there remains a notable gap between the rate offered on a fixed bond versus an ISA. Comparing these rates and considering their existing Personal Savings Allowance (PSA) is essential for savers who routinely utilise their ISA allowance. The current levels of interest offered on cash savings accounts is unlikely to breach the PSA, unless savers have a substantial pot.

“Savers may well continue to put their cash in a flexible account this year, a trend which would echo that of 2021. According to the Bank of England, during November there was an inflow into sight deposits of just over £6 billion, which brings the total for January to November 2021 to £98 billion. Those savers who have their cash invested with a high street bank easy access account for convenience would be wise to compare rates with challenger banks and building societies instead, especially as some of the biggest banking brands pay as little as 0.01% today.”

Rachel Springall, Finance Expert at Moneyfacts, said:

“Savings choice rose year-on-year as there are now 203 more savings deals available for cash investors, however, there is a chance the market could further expand in the months ahead. Indeed, there were 145 more deals back in January 2020 before the savings market was rocked by the pandemic and subsequent base rate cuts in March 2020. In 2022 we could see more options launched to accommodate changing attitudes or needs. Those caught off guard by the pandemic’s influence on their financial resilience could well seek different types of accounts to suit different goals this year. Notice accounts, for example, could be a promising alternative to easy access, as they now pay the highest average rate seen since June 2020.

“The stabilisation with interest rates is evident, as all average savings rates have either risen or remained unchanged month-on-month, a stark contrast to rates hitting record lows last year. As was seasonably typical, there were fewer rate changes last month, but rate rises were more common than cuts, which is encouraging to end the year. The Bank of England’s decision to increase base rate has yet to make a significant impact to variable savings rates and, as we have seen before, this could take a few months to filter through. As was inevitable, the proportion of savings deals to beat base rate fell month-on-month, as base rose to 0.25%. However, there is no guarantee savers will see the 0.15% rise passed on, so it’s important they review their rate regularly.

“Longer-term fixed bond and ISA rates rose and stand at their highest levels since 2020, but one-year fixed bond and ISA rates remained unchanged month-on-month. Regardless, there remains a notable gap between the rate offered on a fixed bond versus an ISA. Comparing these rates and considering their existing Personal Savings Allowance (PSA) is essential for savers who routinely utilise their ISA allowance. The current levels of interest offered on cash savings accounts is unlikely to breach the PSA, unless savers have a substantial pot.

“Savers may well continue to put their cash in a flexible account this year, a trend which would echo that of 2021. According to the Bank of England, during November there was an inflow into sight deposits of just over £6 billion, which brings the total for January to November 2021 to £98 billion. Those savers who have their cash invested with a high street bank easy access account for convenience would be wise to compare rates with challenger banks and building societies instead, especially as some of the biggest banking brands pay as little as 0.01% today.”

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.

 

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.

 

Contact Us 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.
Rachel Springall Press Officer / Finance Expert
Eleanor Williams Press Officer / Finance Expert