Martin Lewis has issued a warning to act now before interest rates are cut(Image: ITV)Martin Lewis has urged anyone with a fixed-rate savings account to look for a fix “today” following the Bank of England’s recent interest rate cuts.
Slashing rates from 4.5% to 4.2% last week, with the Bank of England governor, Andrew Bailey, hinting more cuts could follow.
During a segment on the latest episode of The Martin Lewis Show podcast, available on BBC Sounds, Apple Music and Spotify, the 52-year-old warned that easy access rates would be “coming down”.
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This would be in direct response to the recent changes to interest rates, as returns aren’t likely to get better than they are today.
He explained: “We’re going to see easy access rates, both the ones being offered and your existing accounts, coming down.
“Fixed rate savings tend to factor in future interest rates, so they’re already lower than the easy access interest rates as they’ve factored in much of the [Bank of England] cuts.
“But here’s the key thing. If you’re looking to fix, I would be fixing today.”
He added: “The safest bet is to [fix] today. And also as a general point, analysts are predicting that interest rates are going to come down quite substantially over the next year.
“If you’re risk-averse to rates going much lower and you don’t need access to the money, then the safest thing to do if you’ve got savings is to lock it away in the highest rate fix you can get right now, which will protect you from interest rates dropping.
“I can’t promise anything, we live in such an uncertain world, but the risk-averse thing now is if you’ve got savings and you want to keep a higher rate, would be to lock them in on a fix.”
Martin’s points echoed previous statements from Rachel Springall, an expert at the financial data provider Moneyfacts.
She said: “The Bank of England base rate is expected to fall further this year, which will be disastrous news for savers and will make it essential for them to regularly review the rates on their savings pots.
“The fact is, there are still some really competitive rates to be had … There are still plenty of inflation-busting accounts.”
Last week, Bank of England boss, Andrew Bailey said he would not “give predictions as to when and how much” interest rates could fall again, but said he was “still of the view that the path, gradually and carefully, is downwards”.
However, the recent news of a UK-US deal on tariffs could help the situation, saying it was “important as a signal, I hope, of many more to come.”