The Bank of England has recently announced their third rate rise since December 2021, with current rates at 0.75%. This is to try and combat soaring inflation, which the MPC target to be 2%. The recent rate rise of 0.25% will not drastically improve family finances, but it is set to try and dampen demand whilst not draining the UK economy.
High-street banks are reportedly offering interest rates sub the Bank of England base rate, despite illustrating record years for mortgage interest received. Therefore, this is an important time for savers to increase family finances by shopping around for different savings rates.
For those looking to start saving, Cambridge Building Society are offering 5% on its extra reward savers account, with deposits of £250 a month for 12 months. During this period savers will gain an additional £81.58 in interest.
For those with larger sums to save, Aldermore are offering 0.6% on easy access, with Paragon offering 0.8% with £10,000 savings or more. If a notice account suits you, Investec offer a 32 day notice account with 1.1% annual interest.
In recent research from Paragon, over 75% of personal savings earn a rate of 0.1% or less, which given the UK savings reached £1.7 trillion according to the Bank of England, shows there is a significant amount more interest savers could be achieving.
Importantly we’d always encourage savings to ensure they have full FSCS protection with their bank or building society before depositing funds. Current FSCS limits are £85,000 per person per deposit taker.
Please contact us if you need any advice on tax planning, savings rates or mortgage offers given the cost of living crisis identified.