2 weeks Ago By Kieran Isgin
The Bank of England is poised to announce a potential shift in interest rates this week. The Monetary Policy Committee (MPC) will convene on Thursday, November 7, to determine whether to raise, lower, or maintain the base rate, which currently stands at 5%. Banks nationwide utilise this base rate to set their own mortgage rates for customers, as well as other variable repayment loans.
Consequently, any alteration to the base rate will directly impact some homeowners' finances. The markets are expecting rates to go down. “They will cut almost for sure,” said Jens Larsen, economist at the Eurasia Group consultancy, told the FT on Monday .
"The bank finds itself with room to cut rates” due to inflation pressures easing, George Buckley, economist at financial services group Nomura, also told the Financial Times. In July 2023, the Financial Services Authority published its Cash Savings Market Review, urging banks and building societies to offer better deals and pass on Central Bank rate changes to savers. Despite this, research suggests that many savers may still see their savings eroded by inflation, currently at a mere 1.
7%. TotallyMoney experts have compiled the table below, highlighting 20 of the 'worst' savings accounts for those seeking unrestricted deposit and withdrawal options. 1.
20% 1.20% 1.20% 1.
20% Alastair Douglas, CEO of TotallyMoney, advises: "If you’re sitting on any savings, double check the interest rate as soon as possible. That’s because some are paying below 1%, and the average rate from one of the Big Five Banks is currently 1.74%.
However, it is possible to lock in a rate of up to 4.86%, meaning you could be earning a considerable amount more interest." He adds: "So shop around, and find an account you can bank on.
You will sometimes find that smaller banks try harder to win your custom, and will often provide better service, and pay better rates. And under the Financial Services Compensation Scheme, up to £85,000 per person and per bank, building society or credit union is protected. So you shouldn’t be too concerned if the best offers aren’t from the biggest brands.
" Douglas concludes: "Loyalty doesn’t pay, but a good rate can. If you are looking to make more of your money, shop around for the best offers and consider all your options. You might be better off putting part, or all of your money in an ISA, or an account which requires 90 days notice.
Just make sure it’s right for you, and your needs." TotallyMoney has identified three savings accounts that can beat inflation and allow savers to earn a decent return on their money. The Bank of England predicts that inflation could rise back up to 2.
5% by the end of the year, which could accelerate the depreciation of savings. Calculations show that for average savings of £17,365, someone using the top easy access account (4.86%) could earn £844 in annual interest.
This is compared to just £302 with the average Big 5 bank (1.74%), or £208 if on a rate of 1.2%.
Most people (54%) keep their savings in savings accounts, building societies or National Savings and Investments (NS&Is), 28% in cash ISAs, and 26% in premium bonds . However, 37% of savers haven't switched for five years, 27% have never switched, while only 52% of savers have switched, or plan to switch accounts. Andrew Hagger, a personal finance guru from Moneycomms.
co.uk, urges: "Opening a new savings rate is super easy these days, so there's no excuse to leave your savings pot with a provider giving you a raw deal. Go online and check your current savings rate today, - you may be in for a shock, as your best buy deal from last year may now be just bang average or worse! " He further advises: "The last couple of years have been much better if you have a half decent savings balance - but don't be afraid to move providers to secure a really top rate on your cash.
It's definitely worth taking a peek at the savings best buy tables every 6 months or so just to make sure your rate isn't lagging behind.".
