Savings rate recovery at a slow and steady pace

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Eleanor Williams, Press Officer
Eleanor Williams, Press Officer / Finance Expert T: 01603 476205 E: Email Eleanor
16/08/2021

Savings rate recovery at a slow and steady pace

Savings rate recovery at a slow and steady pace

Moneyfacts UK Savings Trends Treasury Report data reveals not one average savings rate fell month-on-month.

The definitive monthly analysis of savings trends also reports, that except for the notice ISA rate which remained unchanged, all other savings rates rose.

There was a notable improvement to the average one-year fixed bond rate, which saw the largest monthly rate rise since September 2018 and now stands at the highest level since November 2020.

 

Moneyfacts UK Savings Trends Treasury Report data reveals not one average savings rate fell month-on-month.

The definitive monthly analysis of savings trends also reports, that except for the notice ISA rate which remained unchanged, all other savings rates rose.

There was a notable improvement to the average one-year fixed bond rate, which saw the largest monthly rate rise since September 2018 and now stands at the highest level since November 2020.

 

  • All average fixed bond and fixed ISA rates rose month-on-month (July to August) for the second consecutive month. The average one-year and longer-term fixed bond rose by 0.08% and 0.10% respectively and are now the highest they have been since November 2020 at 0.60% and 0.87% respectively. The average no notice rate rose for a second consecutive month and stands at its highest level seen since January 2021 at 0.18%. The average notice rate rose for the fourth month running and stands at its highest point seen since December 2020 when it was 0.47%.
  • The no notice ISA rate rose for a second consecutive month and is now the highest since February 2021, but the average notice ISA rate remained unchanged at 0.31%, a record low.
  • Product choice rose for the fourth month running and there are now 1,553 savings deals (including ISAs) on the market – volumes not seen since April 2020, when there were 1,588 deals.
  • ISA product choice improved to 362 deals, the highest seen since October 2020.
  • All average fixed bond and fixed ISA rates rose month-on-month (July to August) for the second consecutive month. The average one-year and longer-term fixed bond rose by 0.08% and 0.10% respectively and are now the highest they have been since November 2020 at 0.60% and 0.87% respectively. The average no notice rate rose for a second consecutive month and stands at its highest level seen since January 2021 at 0.18%. The average notice rate rose for the fourth month running and stands at its highest point seen since December 2020 when it was 0.47%.
  • The no notice ISA rate rose for a second consecutive month and is now the highest since February 2021, but the average notice ISA rate remained unchanged at 0.31%, a record low.
  • Product choice rose for the fourth month running and there are now 1,553 savings deals (including ISAs) on the market – volumes not seen since April 2020, when there were 1,588 deals.
  • ISA product choice improved to 362 deals, the highest seen since October 2020.

Savings market analysis – average rates

 

Aug-19

Aug-20

Jul-21

Aug-21

Average easy access rate

0.64%

0.22%

0.17%

0.18%

Average easy access ISA rate

0.95%

0.32%

0.23%

0.24%

Average notice rate

1.10%

0.48%

0.42%

0.44%

Average notice ISA rate

1.19%

0.52%

0.31%

0.31%

Average one-year fixed rate bond

1.37%

0.63%

0.52%

0.60%

Average longer-term fixed rate bond*

1.72%

0.84%

0.77%

0.87%

Average one-year fixed rate ISA

1.30%

0.56%

0.39%

0.45%

Average longer-term fixed rate ISA*

1.51%

0.75%

0.66%

0.73%

*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

 

Aug-19

Aug-20

Jul-21

Aug-21

Number of live savings account options (excluding ISAs)

1,487

1,083

1,148

1,191

Number of live ISA options

453

319

352

362

Source: Moneyfacts Treasury Reports

Savings market analysis – average rates

 

Aug-19

Aug-20

Jul-21

Aug-21

Average easy access rate

0.64%

0.22%

0.17%

0.18%

Average easy access ISA rate

0.95%

0.32%

0.23%

0.24%

Average notice rate

1.10%

0.48%

0.42%

0.44%

Average notice ISA rate

1.19%

0.52%

0.31%

0.31%

Average one-year fixed rate bond

1.37%

0.63%

0.52%

0.60%

Average longer-term fixed rate bond*

1.72%

0.84%

0.77%

0.87%

Average one-year fixed rate ISA

1.30%

0.56%

0.39%

0.45%

Average longer-term fixed rate ISA*

1.51%

0.75%

0.66%

0.73%

*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

 

Aug-19

Aug-20

Jul-21

Aug-21

Number of live savings account options (excluding ISAs)

1,487

1,083

1,148

1,191

Number of live ISA options

453

319

352

362

Source: Moneyfacts Treasury Reports

Rachel Springall, Finance Expert at Moneyfacts, said:

“The savings market continues to move in a positive direction as rates across most of the savings spectrum improve at a slow and steady pace. Savers who may be coming off a one-year fixed bond and wish to lock into a new deal will find notable improvements to the top rate tables over the past few months, and whilst the average return is 0.03% less than a year ago – it is still moving in the right direction and further away from the record low recorded in April this year. Longer-term fixed bonds also improved this month, but it is unclear whether savers are yet prepared to tie up their money for longer than a year when chasing the top returns.

“Choice has expanded in the market for a fourth consecutive month which is encouraging for savers and a catalyst for providers to keep on top of the competition and perhaps enhance their deals in response. We now have the most savings providers on record, and more brands can mean more competition. After the market endured turmoil due to the pandemic and subsequent base rate cuts, there is more room for improvement, but it is still good to see rates rise instead of fall as only a few months ago average rates throughout sat at record lows.

“Savers yet to utilise their ISA allowance or who are perhaps considering their options if they have an ISA set to mature this autumn will note some improvements to the market as there are now more ISA options than there have been since October 2020 when there were 373 deals. However, when comparing average rates, fixed ISAs are still paying below their fixed bond counterparts, so savers must consider their options if they have a Personal Savings Allowance and some savers may even decide to withdraw funds from ISAs entirely. Indeed, according to the Bank of England, there was an outflow of £699m from cash ISAs during June, bringing the total outflow so far during 2021 to almost £2.8bn. However, easy access accounts remain a firm favourite amongst savers looking for flexibility with their cash. The inflow into sight deposits during June was almost £10bn, and over £66bn so far this year.

“Providers and savers alike will need to keep a close eye on the ever-changing market by monitoring the top rate tables. The consecutive rate rises across much of the savings spectrum are green shoots of life to a market that felt barren only a few months ago and there is no telling how long a good deal will last. It is evident that savers have disposable income to put aside and some may be using their pot to supplement their income, so it is hoped providers will inject more competition in the months to come to encourage consumers to take advantage.”

Rachel Springall, Finance Expert at Moneyfacts, said:

“The savings market continues to move in a positive direction as rates across most of the savings spectrum improve at a slow and steady pace. Savers who may be coming off a one-year fixed bond and wish to lock into a new deal will find notable improvements to the top rate tables over the past few months, and whilst the average return is 0.03% less than a year ago – it is still moving in the right direction and further away from the record low recorded in April this year. Longer-term fixed bonds also improved this month, but it is unclear whether savers are yet prepared to tie up their money for longer than a year when chasing the top returns.

“Choice has expanded in the market for a fourth consecutive month which is encouraging for savers and a catalyst for providers to keep on top of the competition and perhaps enhance their deals in response. We now have the most savings providers on record, and more brands can mean more competition. After the market endured turmoil due to the pandemic and subsequent base rate cuts, there is more room for improvement, but it is still good to see rates rise instead of fall as only a few months ago average rates throughout sat at record lows.

“Savers yet to utilise their ISA allowance or who are perhaps considering their options if they have an ISA set to mature this autumn will note some improvements to the market as there are now more ISA options than there have been since October 2020 when there were 373 deals. However, when comparing average rates, fixed ISAs are still paying below their fixed bond counterparts, so savers must consider their options if they have a Personal Savings Allowance and some savers may even decide to withdraw funds from ISAs entirely. Indeed, according to the Bank of England, there was an outflow of £699m from cash ISAs during June, bringing the total outflow so far during 2021 to almost £2.8bn. However, easy access accounts remain a firm favourite amongst savers looking for flexibility with their cash. The inflow into sight deposits during June was almost £10bn, and over £66bn so far this year.

“Providers and savers alike will need to keep a close eye on the ever-changing market by monitoring the top rate tables. The consecutive rate rises across much of the savings spectrum are green shoots of life to a market that felt barren only a few months ago and there is no telling how long a good deal will last. It is evident that savers have disposable income to put aside and some may be using their pot to supplement their income, so it is hoped providers will inject more competition in the months to come to encourage consumers to take advantage.”

Brand Logo Moneyfacts Treasury Reports

 

Moneyfacts Treasury Reports are the definitive monthly analysis of Mortgage and Savings trends emailed in PDF format. Unsecured Lending trends analysis is emailed quarterly. Available by annual subscription, please call (01603) 476850.

 

Moneyfacts Treasury Reports are the definitive monthly analysis of Mortgage and Savings trends emailed in PDF format. Unsecured Lending trends analysis is emailed quarterly. Available by annual subscription, please call (01603) 476850.

Brand Logo Moneyfacts Treasury Reports

 

Moneyfacts Treasury Reports are the definitive monthly analysis of Mortgage and Savings trends emailed in PDF format. Unsecured Lending trends analysis is emailed quarterly. Available by annual subscription, please call (01603) 476850.

 

Moneyfacts Treasury Reports are the definitive monthly analysis of Mortgage and Savings trends emailed in PDF format. Unsecured Lending trends analysis is emailed quarterly. Available by annual subscription, please call (01603) 476850.

Brand Logo Moneyfacts Treasury Reports

 

Moneyfacts Treasury Reports are the definitive monthly analysis of Mortgage and Savings trends emailed in PDF format. Unsecured Lending trends analysis is emailed quarterly. Available by annual subscription, please call (01603) 476850.

 

Moneyfacts Treasury Reports are the definitive monthly analysis of Mortgage and Savings trends emailed in PDF format. Unsecured Lending trends analysis is emailed quarterly. Available by annual subscription, please call (01603) 476850.

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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).

 

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