Unews World
The choice of cash savings products reached a new record high in September, but only around a quarter of accounts beat the Bank of England base rate, according to analysis.
Moneyfacts counted 2,289 savings deals, including cash Isas, in September, marking the highest total since its records started in February 2007.
The website said the choice of cash Isas rose to 662 deals in September, marking a record high and the eighth monthly rise.
The number of savings providers overall rose to 155, which was also a new high for Moneyfacts’ records.
It also found that despite the Bank of England base rate having recently been reduced, only 26% of savings accounts on the market can beat it. Accounts were defined as beating the rate if they paid more than the base rate, which is currently set at 4%.
The average savings rate available fell to 3.46% in September, down from 3.50% in August. A year ago, the average savings rate was 3.80% and in September 2023 it was 4.29%.
The average savings rate was calculated from the “core” savings market, with some exclusions. Products that were excluded included children’s accounts, regular savings and Lifetime Isas.
The average easy access rate fell to 2.59% in September, marking its lowest level since July 2023 (2.41%).
The average easy access Isa rate fell to 2.82%, also its lowest level since July 2023 (2.54%).
The average one-year fixed bond rate fell to 3.96% in September, its lowest level since May 2023 (3.93%).
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The average one-year fixed Isa rate fell to 3.91%, also its lowest level since May 2023 (3.80%).
Rachel Springall, a finance expert at Moneyfacts, said: “In July, only one in 10 of standard savings accounts (10%) could beat 4.25%, and with a 0.25 percentage point cut made in August, that’s only improved slightly to one in four, or 26% of all accounts paying more than 4%.”
She said that with inflation expected to creep up, many savers could see their pots eroded in real terms.
Consumer Prices Index (CPI) inflation increased to 3.8% in the 12 months to July, from 3.6% in the 12 months to June, the Office for National Statistics (ONS) has said.
Ms Springall added: “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 (the Bank of England base rate), when 56% could do so.”
She continued: “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.”
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