You are here: Home - Saving & Banking - News -

It’s official. August was the worst month for savings rates

0
Written by:
13/09/2016
August was officially the worst month of the year so far for savings rates, with around 130 cuts to every one rate rise, according to figures from Moneyfacts.co.uk.

The data firm recorded just three rate increases last month but a staggering 388 rate falls, with some deals plunging by as much as 1.30%.

These rate cuts have pushed savings rates to new lows. The average five-year fixed rate bond has fallen from 2.64% to 1.66% in one year, while the average easy access ISA has dropped from 1.12% to 0.82% in the same period.

Savers have had to contend with years of poor returns but the Bank of England rate cut in August from 0.5% to 0.25% added to their woes.

“Some of the rate cuts made during August were well over what was initially expected, with some deals cut by as much as 1.30% – over five times the base rate cut,” said Rachel Springall, finance expert at Moneyfacts.

“These higher cuts have not gone unnoticed, as the Financial Conduct Authority are to investigate what lenders are passing on to borrowers and what cuts are being made to savings rates.”

But it’s not just rate cuts causing problems for struggling savers. Some of the best deals have been withdrawn so that providers can cope with demand.

A total of 20 top ten deals have vanished since the start of August, according to Moneyfacts.

However, there was a glimmer of good news with inflation last month remaining static at 0.6%, which means savers have little to worry about in terms of savings erosion.

The vast majority of the 661 savings accounts currently on the market can beat or match inflation.

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

The savings accounts paying the most interest

If one of your jobs this month is to get your finances in order, moving your savings to a higher paying deal i...

Coronavirus and your finances: what help can you get in the second lockdown?

News and updates on everything to do with coronavirus and your personal finances.

Everything you need to know about being furloughed

If you’ve been ‘furloughed’ by your company, here’s what it means…

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

Having a baby and your finances: seven top tips

We’re guessing the Duchess of Cambridge won’t be fretting about maternity pay or whether she’ll still be...

Protecting family wealth: 10 tips for cutting inheritance tax

Inheritance tax - sometimes known as 'death tax' - can cause even more heartache for bereaved families. But th...

Travel insurance: Five tips to ensure a successful claim

Ahead of your summer holiday, it’s important to make sure you have the right level of travel cover or you co...

Money Tips of the Week

Read previous post:
Mortgage problems block one in three house sales

Mortgage issues are the main reason for house sales and purchases falling through, according to research.  

Close