Savings

• The Consumer Price Index (CPI) fell to 3.0% during January, from 3.4% in December. The Bank of England’s projection rate for inflation during Q1 2027 is 1.7%.
• The Moneyfacts Average Savings Rate currently sits at 3.31%, which is higher than inflation, so savers can get real returns on their cash but it’s still important to shop around for the best rates.
• There are currently 1,607 savings accounts that beat inflation* (157 easy access, 147 notice accounts, 133 variable rate ISAs, 382 fixed rate ISAs and 788 fixed rate bonds).
• In February 2025, there were 1,516 deals that could beat CPI which was then at 3.0% (January 2025 CPI) and in February 2024, there were 953 deals that could beat CPI which was at 4.0% (January 2024 CPI).
• Between February 2021 and February 2026, the Moneyfacts Average Savings Rate averaged around 2.66%, meanwhile inflation averaged 4.71%. This means that savers are £1,184 worse off in ‘real’ terms on average based on a savings pot of £10,000 over five years.

Caitlyn Eastell, Spokesperson at Moneyfactscompare.co.uk, said:

“Savers have lost almost £1,200 on average in real terms over the past five years, despite savings rates hitting post-2008 highs, as inflation surged to over 40-year peaks and ate away at the value of cash savings. While the top non-ISA savings accounts currently boast higher headline rates, the tax-free interest offered by cash ISAs could leave many savers even better off in real terms, particularly those at risk of breaching their Personal Savings Allowance. However, with inflation set to cool, savers could soon choose from a larger pool of products that offer inflation-busting returns even with potential base rate cuts looming because inflation is falling faster than savings rates.

“Unsurprisingly, the deals that have suffered the biggest blows over the past month are those with shorter fixed terms or variable rates, suggesting that the window to secure competitive rates is closing as providers could already be pricing in future rate cuts. The top long-term ISAs and non-ISAs currently offer around 4.50%, therefore they may become an increasingly attractive option in the fading rate environment, as they guarantee set returns and can help with future planning. However, these deals may not be for everyone, and savers should carefully balance the appeal of certainty against their need for access.”

Data note: Please note that these savings product numbers include deals that are available to UK residents (easy access accounts, notice accounts, fixed rate bonds, variable Cash ISAs and fixed Cash ISAs) and exclude regular savers, children’s savers, variable rate fixed term bonds or ISAs, JISAs and LISAs, based on a £10,000 deposit, gross rates. Higher rates may be available for other levels of deposit.