Savings Rates Decline Despite Record High Product Choices in UK Market
Savings rates are experiencing a significant decline across the board, financial experts have cautioned, even as the market offers an unprecedented number of choices for consumers. The latest Moneyfacts UK Savings Trends Treasury Report highlights this concerning trend, urging savers to remain vigilant despite the abundance of options.
Overall product choice surged by its largest margin since June 2023, reaching a record 2,394 savings deals, including ISAs. This figure represents the highest level ever recorded in the report's history. Excluding ISAs, the product count rose to 1,726, marking the highest number of non-ISA products in over 16 years, since November 2009.
Additionally, the choice of cash ISAs increased for the third consecutive month, climbing to 668 deals from 657, setting another record high. However, this expansion in options is overshadowed by a widespread drop in interest rates.
Rate Declines Across Key Savings Categories
The average easy access rate fell to 2.41%, its lowest point since July 2023. Similarly, the average easy access ISA rate dropped by 0.11% to 2.58%, experiencing its most significant decline since January 2025 and reaching its lowest level since July 2023.
Fixed rates are also on a downward trajectory. The average one-year fixed rate decreased to 3.81%, its lowest since April 2023, while the longer-term average fixed rate fell to 3.79%, the lowest since November 2022.
Overall, the Moneyfacts Average Savings Rate declined from 3.35% to 3.31% for February, the lowest figure since May 2023. Over the past year, this rate has fallen from 3.69% to 3.31%, indicating a persistent downward trend.
Expert Insights on Market Dynamics
Caitlyn Eastell, Personal Finance Analyst at Moneyfacts, commented on the situation, stating, "Savers now have more choice than ever before as the number of products and providers reach record-highs. Lesser-known banks help the market grow and can be a source of innovation as they typically need to compete harder for savers’ hard-earned cash. However, many average rates continue to fall across the board."
She further noted that variable ISAs and non-ISAs are now at their lowest levels in almost three years, with most fixed rates also at their lowest in nearly three years, except for long-term non-ISAs, which are at a four-year low.
Eastell emphasized, "It would not be surprising if the fading rate environment leaves savers disheartened, but it’s vital that they do not give in to apathy as they can still get over 4% on the most competitive accounts."
This report serves as a crucial reminder for savers to actively seek out the best deals amidst a challenging rate landscape, leveraging the increased product availability to secure higher returns where possible.
