For many savers, the Bank of England's latest rate cut has brought unwelcome news. Earlier this month, the base rate was lowered to 4%, the first drop in more than four years. While that might sound like good news for borrowers, it's already feeding through into smaller returns for anyone with money in the bank.
Over the past fortnight, more than 20 banks and building societies, including NatWest, Santander, and Chase, have reduced their savings rates. Some have cut by half a percentage point overnight.
For households that've worked hard to set money aside after years of higher living costs, the changes are frustrating. Many people who locked into "competitive" rates earlier this summer will already find those deals worse.
Thankfully, there are still options. Some smaller providers, such as the Zopa Biscuit card or Trading 212, offer rates ranging from 4.05% to 7%, although some providers may come with limits or require tying up your cash for a year or more. Cash ISAs remain attractive, thanks to their £20,000 annual allowance, which comes with tax-free interest.
It's also a good moment to check your older, easy-access accounts. Banks sometimes reduce rates quietly, leaving savers with earnings that are less than they expected. Even a small switch to a higher interest rate can make a difference if you have long-term savings.
Borrowers may welcome lower interest rates if further cuts follow, but savers are facing the opposite effect. Unless you take time to switch or double-check your savings, the real value of your money may continue to erode, a reminder of the tough climate.
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