Caitlyn Eastell, Personal Finance Analyst at Moneyfactscompare.co.uk, said:

“Forecasts for inflation remaining above the Bank of England’s 2% target should be a wake-up call for savers. If inflation reaches 3.2%, as currently projected in Q4 of 2026, someone with £10,000 in cash would need to earn around £320 in interest over the year just to keep pace with rising prices. 

“On today’s rates around one in four savings accounts fail to match forecasts and some savers risk seeing their cash being quickly eroded. The danger is that even on a sub-par rate, savers may see their account balance increasing and assume their money is working hard, when in reality it could be losing value in real terms and may hit those who have left their savings in the same account for years without checking the rate the hardest. 

“Savers aren’t powerless against inflation, currently over 1,800* accounts can outpace it, with the best rates paying upwards of 5%. Even small differences in interest can become significant, particularly over several years. Savers fixing £10,000 for five years at 2% could earn £1,040, compared to around £2,915 from the market-leading five-year bond at 5.25%. An almost £1,900 difference is a significant loss and is one that many savers may not be able to afford. It should serve as a reminder that simply sticking with an existing account could mean missing out on valuable returns and it’s important savers are proactively checking that their savings rates are still competitive. As inflation continues to put pressure on households, this is one of the best ways savers can protect the value of their cash.” 

*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.