Savers urged to ‘act’ as 7 banks set to cut savings rates by 0.29% – full list | Personal Finance | Finance

Savers have been urged to “act now”, ahead of a wave of confirmed savings account interest rate cuts. The Bank of England reduced the base rate to 3.75% in December, and variable interest-paying savings accounts are paying the price. 

As many as seven banks have confirmed reductions to rates on live accounts – those still open to new customers – in the coming weeks. This makes it even more important for customers with “closed” accounts, which are no longer open to new customers, to check emails or letters from their provider about any changes, as these reductions are less widely publicised. Rachel Springall, finance expert at Moneyfactscompare.co.uk told the Express: “Now is the time to act. Check any savings accounts that pay a variable rate immediately. Those are the ones that get hit by base rate cuts, and be sure to switch if it’s paying a poor return.”

She added: “Interest rates are expected to come down further; we just don’t know exactly when or by how much, so savers need to stay vigilant.”

Research by Moneyfactscompare.co.uk shows some of the major players, including Barclays, HSBC, TSB, the Co-operative Bank, and Virgin Money, are soon to cut interest rates on a range of live accounts by up to 0.25% in March 2026.

The digital app-based accounts from First Direct and Spring have also confirmed interest rate cuts in March, with some variable accounts paying 0.29% less.

While the headline rates are falling, some of these accounts are still offering attractive deals.

For example, Spring, an easy-access app-based savings account offered by Paragon Bank, will still pay nearly three times the interest offered by the banking giant Lloyds.

Ms Springall said: “One of the most flexible and transparent easy access accounts on the market comes from Spring, it pays an inflation-busting 4.11% AER/4.03% gross and doesn’t carry a bonus.

“The rate on the Spring account may be getting cut, but it’s still a great account with a competitive rate and full flexibility.”

She added: “It is easy to see how better off savers can be if they switch from a high street bank, as Lloyds Bank pay just 1% on its easy saver.

“Savers who want quick access to their cash should be looking for a rate that pays as close to 4% as they can, but keep in mind some providers may still be preparing to cut in the coming weeks.”

Earlier this month, Moneyfacts found that the biggest banks offer just 1.19% on their flexible easy-access accounts on average, down from 1.37% last year. The average easy-access rate sits at around 2.42%.

However, the research found that the top challenger banks offer 4.12% on average across their easy access accounts.

Based on this, a saver with £10,000 in an easy access account earning a typical big bank rate could earn £293 more a year by switching to a typical challenger bank rate.

Caitlyn Eastell, personal finance analyst at Moneyfactscompare.co.uk, said: “Loyalty to big banks can leave savers hundreds of pounds worse off, an amount that many may struggle to spare. Switching to a lesser-known challenger bank could help offset this, as they often offer more attractive rates.

“Someone with £10,000 in a typical big bank easy-access account could earn just £119 in a year, compared to the £412 in a typical top challenger bank easy-access account. The incentive to switch quickly becomes clear, but even small differences in interest rates can make a big impact over time.”

However, she pointed out that challenger banks often lead the market with headline rates that include limited-time bonuses, sometimes exceeding 2%.

Ms Eastell said: “Bonus rates reward active switchers, allowing them to access the best rates and boosted returns in the short-term, but they also drive competition between providers, pushing banks to offer better deals all-round.

“Once bonuses expire, rates can fall sharply, so passive savers risk being left behind, and those seeking stability may find these less suitable for long-term planning.”

Philly Ponniah, chartered wealth manager and financial Coach at Philly Financial, said “big banks are relying on inertia, full stop”.

She said: “Paying 1.19% when challengers average over 4% is a huge loyalty penalty. In a year where rates are drifting down, staying put will cost you. Easy access should still work hard, and switching takes minutes online. The key point is that you do not need to take extra risk to earn more.

“As long as the bank is FSCS-protected, your money has the same safety net up to the limit. But savers need to stay alert as many top rates include short-term bonuses. When those end, the rate can reduce fast.

“The winners are active savers who review their accounts at least once a year and move if needed. Choosing an account that pays interest monthly also gives you flexibility, as you can walk away with the interest earned if you switch mid-year.”

The Bank of England’s Monetary Policy Committee (MPC), which decides on changes to central interest rates (the Base Rate), will next meet on Thursday, March 19.

The Base Rate is the interest rate that the Bank of England pays to commercial banks, building societies, and financial institutions that hold money with it. It is also the rate charged on loans that the Bank of England may provide to these institutions.

This rate significantly influences the lending and savings rates set by banks. For example, when the Bank of England raises the Base Rate, banks typically increase the interest rates they charge their customers on loans and the interest they pay on savings. Conversely, when the Bank of England lowers the Base Rate, banks usually reduce these rates as well.

The BoE increases the Base Rate to stem consumer spending and bring down inflation, and reduces it if inflation is dropping too quickly or there is a need to stimulate further economic growth.

After the latest data showing the UK’s Consumer Price Index (CPI) inflation rate had fallen from 3.4% to 3% in the 12 months to January, markets widely expect the MPC to cut the Base Rate in March by at least 0.25%, reducing it from the current 3.75% to 3.5%.

Sally Conway, savings expert at Shawbrook Bank, said: “A drop in inflation is good news for savers as it means their money is finally working harder in real terms. But it could also signal that savings rates are nearing a turning point.

“If inflation continues to ease, the pressure builds on the Bank of England to cut rates, with the next decision due on March 19. The last vote was finely balanced, and markets are already signalling that a cut could be on the horizon. For savers, this could be a last chance to secure today’s stronger returns.

“Now is the time to check your rate, switch if necessary, and consider locking in a competitive deal before the window begins to close.”

Harriet Guevara, chief savings officer at Nottingham Building Society, added: “Lower inflation helps protect the real value of cash, but it’s often the point at which savings rates begin to soften as lenders anticipate base rate cuts.

“With rates still relatively competitive, now might be a good time to review how hard your money is working for you.

“This is why it pays to be proactive now. Check what you’re earning, compare options carefully across your accounts, and think about what matters most to you right now: locking in certainty with a fixed rate, or keeping flexibility with easy access.

“Acting early, while rates remain strong, can help ensure your savings continue to work as hard as possible over the year ahead.”