despite the fall in inflation, no savings account or ISA can currently match or beat the 2 per cent rate, and with this figure projected to reach 3.3 per cent or more by the end of the year, savers are likely to struggle to find savings accounts which will help them to keep up with the increasing the cost of living.
“There has been a notable uplift to market-leading savings rates on offer since last month across various types of accounts and terms, which is positive to see,” Rachel Springall, from Moneyfacts.co.uk. explained. “However, inflation is eating its way into savers’ hard-earned cash and with the expectation for it to rise, its eroding power will not be easing any time soon. Savers would be wise to not let this deter them from finding a more attractive rate, as deals are improving, and they may miss out on a market-leading rate if they become apathetic.”
She further noted that given the uncertainty caused by the pandemic, most savers may wish to keep their cash close to hand, especially through easy access accounts. According to Springall, fortunately, rates have been slowly improving in this sector, with Tandem Bank offering the top rate at 0.65 per cent. This is in stark contrast to high-street banks, which pay as little as 0.01 per cent on easy access accounts. Moreover, the finance expert pointed out that while the rate offered by Tandem Bank is a market-leader for new customers, the account also supports the bank’s green lending objectives. This means savers will be able to earn a decent return while supporting ethical initiatives in the process.
“To mitigate the impact of inflation, switching accounts for a more attractive return is essential and considering the more unfamiliar brands would be wise as they continue to inject competition across the savings spectrum. Signing up to rate alerts and newsletters to keep abreast of the changing top rate tables is a good idea, as savers may need to act swiftly to take advantage,” Springall advised.
