High street banking giant NatWest has issued a two-week warning to millions of customers, confirming it will slash interest rates on a range of its savings accounts later this month.
Rate Reductions Coming into Force
The bank has begun contacting customers to inform them that the new, lower rates will take effect on January 19, 2026. This decision follows the recent reduction in the Bank of England base rate, a move that typically prompts commercial banks to adjust their own offerings downwards.
In a statement to customers, NatWest said: "We want to let you know we're changing the interest rate on your account(s). You may have heard the news that the Bank of England has decided to reduce the base rate. We've been looking at our rates too, as well as what's on offer from other savings providers right now, and we've decided to reduce some of our interest rates."
Specific Account Changes
The changes impact several popular savings products. Key reductions include:
- Digital Regular Saver: The Annual Equivalent Rate (AER) will fall from 5.50% to 5.25%.
- Flexible Saver (£1 - £24,999): The rate drops from 1.06% to 1%.
- Savings Builder (£1 - £10,000): Reduced from 1.50% to 1.25%.
- Help to Buy ISA, First Saver, and Adapt Account: These will all see their rates cut from 1.85% to 1.60%.
Broader Impact for UK Savers
This move by one of the UK's largest banks is a significant blow to savers seeking to grow their money. While falling interest rates can be beneficial for borrowers, such as those with mortgages, they directly reduce the potential returns on savings.
Financial experts often advise that when a major provider like NatWest cuts its rates, it may signal the start of a wider trend across the banking sector. Other high street banks are likely to follow suit with similar reductions over the coming weeks and months.
Consequently, NatWest itself has acknowledged that the changes may lead customers to "look elsewhere for the best options currently on the market." Savers are now encouraged to actively compare rates from different providers to ensure their money is working as hard as possible in the new lower-rate environment.
