Brits have been warned that they could risk losing out on £300 within the next year after the Bank of England (BoE) cut interest rates. The BoE slashed rates to 4% – the lowest level in two years – and the fifth reduction since August 2024. However, a finance expert warned savers that they could be locked out of the competitive rates currently offered by savings accounts if they don’t act quickly.
Antonia Medlicott, managing director of financial education specialists Investing Insiders, revealed that not acting now could cost Brits more than £300 within the next year. She explained that current deals banks offer on savings accounts may “vanish fast” following the BoE’s decision, specifically those offering rates above 5.5%.
She said: “Savers risk missing out on hundreds a year in interest if they delay. We’re at a tipping point where savings accounts still offer rates above 5.5%, but those deals are likely to vanish fast.”
Analysis by Moneyfacts added that switching £10,000 into an account with a top interest rate now could earn more than £300 extra a year compared to the average rate with an ISA.
While all savers should hunt around for the best deals, Antonia warned that delaying the switch could leave people missing out.
She said: “Savers currently earning under 4.5% are urged to switch now to prevent leaving money on the table, with economists currently predicting further cuts in November, possibly reaching as low as 3.5% by the end of this year.
“Banks are quick to adjust interest rates on savings accounts downwards, usually much faster than they increase. Most people are unaware of how quickly savings rates change. The public should act quickly.”
Antonia also offered advice on which accounts provide the best opportunities to maximise savings.
The top interest rate outside of a Cash ISA is currently 6% at Santander, she said, but this is a bonus rate with restrictions that savers should be aware of.
The top rate for a Cash ISA is currently 5.44% with CMC Invest, and any gains are sheltered from tax.
Antonia added: “Remember to utilise ISA allowances as cuts to capital gains tax allowance will mean more and more people are pulled into paying tax.
“This is especially true for higher-rate taxpayers who are urged to prioritise ISAs over standard savings accounts due to the reduced rate on the personal allowance.”
