Big banks, small savings rates

Following the latest Bank of England UK base rate cut on 8th May, savers have experienced mixed treatment from their savings providers, depending on who their cash is held with. This base rate cut was the second of 2025, the first occurring in early February. It now stands at 4.25%, down from a high of 5.25% in August 2024.

Perhaps unsurprisingly, many of those who have cash in high street bank easy access accounts will have either already experienced or been notified of rate changes in response to this latest move by the Bank of England. And these are in addition to further cuts made earlier this year.

For example:

• Barclays will reduce the rate on its Everyday Saver from 1.16% to 1.11% AER on 4th August - down from 1.51% for balances of £10k or less just a few months ago.
• HSBC is cutting its Flexible Saver from 1.35% to 1.30% AER on 21st July. At the start of the year, the rate was 1.75%.
• NatWest is also reducing rates on its Flexible Saver from 30th May, cutting between 0.10% and 0.15% depending on the balance held;
  • £1 and £25,000, the rate will drop to 1.10% AER – down from 1.60% in January.
  • £25,000 and £100,000, it will fall to 1.70% AER – 0.40% lower than it was at the beginning of the year.

It’s not just the high street

It’s not only the big banks making cuts. The rates on over 100 easy access accounts have fallen since 8th May!  

At the beginning of the year, before the February base rate cut, Gatehouse Bank offered 4.75% on its top unrestricted easy access account. Today, following two base rate cuts totalling 0.50%, this account is now paying 4.15% - so has cut at the same rate.

The difference, of course, is that the Gatehouse account is still competitive – paying just a little less than base rate – and importantly, more than inflation.  

Best buy rates are holding steady – for now

For those who are prepared to shop around and switch, the good news is that the top easy access rates have barely changed, although the providers do vary.  

At the start of the year, the average of the top five easy access accounts was 4.79%. At the time of writing, it stands at 4.66%, with the top rate – Chip Easy Access Account - offering 4.77% AER.

Let’s put that into perspective. On a balance of £50,000:

With Barclays, you'd earn just £555 per year.

With Chip, you’d earn £2,385 - a difference of £1,830 for doing nothing more than moving your money.

I expect to see more cuts, not only to the top rates on offer, but especially those accounts that have been withdrawn from sale and are therefore less visible. It’s vital to keep an eye on the interest rates you are earning on your existing savings.  

If your cash is sitting in a high street easy access account or any other poor paying account, don’t wait for rates to be cut further. You’re likely to already be getting a raw deal. Switch today and get your money working harder.

In the wider market, it’s been pretty steady too.

Fixed Rate Bonds

While the top 1-year and 2-year fixed bond rates have dipped slightly over the last week, the top 3-year and 5-year rates have actually increased. This has brought all terms into closer alignment, making longer-term fixes more attractive than they have been for a while.

This could be welcome news for savers who were previously reluctant to lock their money away due to lower long-term rates.

Of course, with the recent uptick in inflation, further base rate cuts may be delayed, but the overall trajectory still seems to be downward. So, if you choose to lock in now, you might be glad you did when your bond matures in a few years’ time and rates have dropped further.

Fixed Rate ISAs

Fixed rate cash ISAs have also shown resilience. Although the top 3-year ISA rate has fallen slightly, the top 1-year and 5-year ISA rates are slightly higher than they were a week ago, and the 2-year rate remains unchanged - encouraging signs considering the recent base rate cut.

Remember, while ISA rates often look lower than equivalent fixed bonds, after tax, ISAs can actually deliver better returns for those paying tax on their savings interest. Of course, it’s also important to find the best rates, to earn as much interest as you can.

Take a look at our Best Buy tables here

But shopping around to make your money work harder is often ignored – even though it is effectively like being given free money when you switch to a better paying account.

According to a recent survey that we conducted, one of the main reasons that savers keep money in low paying accounts – earning less than 2% in interest – was because of the perceived administrative hassle of moving it.

But the rise of cash platforms means that this hassle is removed.

With just one account set up and one log in, you can access a range of competitive accounts with multiple providers – from easy access to fixed rate bonds – with just a few clicks. No more completing a new application form each time you want to move your money to earn more interest.

While not whole of market, these platforms often feature attractive and even market-leading and exclusive rates. The key advantage is the ease of spreading your savings across different accounts; maximising protection under the Financial Services Compensation Scheme (FSCS) while optimising your returns.

With our Savers Hub, powered by Insignis, you can now open, manage, and switch between multiple competitive savings accounts - all from a single convenient login.

Book a demonstration to see how easy it is to manage your savings – or request a personalised illustration to see how much interest you could be enjoying. There’s no obligation, so the only thing you are missing out on is the possibility of more interest!

This article is intended for general information only, it does not constitute individual advice and should not be used to inform financial decisions.

The Financial Conduct Authority (FCA) does not regulate cash flow planning or tax advice.