The Bank of England has raised its base rate for the 14th consecutive time, but big banks are barely passing on rate rises to savers. And when they are, it’s by tiny amounts.
In fact, big banks have been so slow to raise savings rates that the Chancellor of the Exchequer raised the issue with banks directly in June. And the Financial Conduct Authority recently announced a 14-point action plan to address the issue.
In the last 18 months, the base rate has risen rapidly – jumping to 5.25%.
In contrast, the average instant access rate dragged up to just 2.24%. This looks even smaller when you consider that the average two-year fixed mortgage rate has risen to 6.83%.
This is costing everyday savers billions.
In summer 2023, there was over £900bn of UK savings sat in easy access accounts. Much of it with high street banks paying very low rates.
For the average household, the difference in returns is shocking. Based on a savings pot of £30,000 held for five years, the difference between the average easy access rate and top 10 easy access rates is over £3,510.
That’s a significant amount, especially when we’re still contending with sky-high inflation. This example assumes savings rates doesn’t change for five years and no further deposits or withdrawals are made. Please note easy access rates can change at any time and the interest earned depends on personal circumstances, rates available and the options you choose.
How to get a better savings rate
It’s time to join the savings revolution.
Smaller banks have to work harder to raise money. As a result, they’re quicker to pass on higher rates to savers and compete with each other for your cash.
Active Savings has partnered with a wealth of partner banks and building societies, to help you take back control of your savings. You can access a range of savings products from our banking partners, all through a single online account.
The best easy access rate available through Active Savings is more than double the market average.
Comparisons with average market rates for easy access products are based on instant access products which allow immediate withdrawals. Active Savings offers easy access products and withdrawals usually take one working day.
Picking and switching savings rates is simple and you can do it in a handful of clicks. Please note fixed term products only usually allow you access to your money once it matures.
Source for average market rates: Bank of England, 31 July 2023. Products can be added or withdrawn at any time.
This website is issued by Hargreaves Lansdown Asset Management Limited (company number 1896481), which is authorised and regulated by the Financial Conduct Authority with firm reference 115248.
The Active Savings service is provided by Hargreaves Lansdown Savings Limited (company number 8355960). Hargreaves Lansdown Savings Limited is authorised and regulated by the Financial Conduct Authority (firm reference number 915119). Hargreaves Lansdown Savings Limited is authorised by the Financial Conduct Authority under the Electronic Money Regulations 2011 with firm reference 901007 for the issuing of electronic money.
Hargreaves Lansdown Asset Management Limited and Hargreaves Lansdown Savings Limited are subsidiaries of Hargreaves Lansdown plc (company number 2122142).
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