Savers could lose £275 from their cash
The Iran war could cost savers £275 even as interest rates are set to rise. Savers could lose £275 from their cash pots – despite interest rates on cash savings accounts being expected to rise in the coming months.
Analysis by Moneyfacts suggests that in a worst-case scenario, you could end up with £275 less in your savings than if the war hadn’t started. Adam French, head of consumer finance at Moneyfacts, said that in this scenario, savings rates could hit 4.75%.
If you had £10,000 saved with a 4.75% interest rate, you’d earn £475 interest over the year, but because the inflation rate would be higher, you’d be left £145 worse off.
READ MORE Foreign Office issues warning as ‘airports closed’ with ‘no flights’ to or from UK
Had the war not began in February, the same cash savings would have earned you £330 in interest. With inflation expected to fall, it means you would’ve gained £130 in real terms.
It means potentially missed out on that £130 boost but you’ve also lost £145 in real terms – adding up to £275.
Mr French said savers will be left in “an increasingly difficult position” if they see the real value of their cash “steadily eroded”.
Every bank or building society in this guide is fully UK-regulated and covered by the Financial Services Compensation Scheme (FSCS). From 1 December 2025, the amount protected if a provider goes bust increased from £85,000 to £120,000 per person, per institution (or £240,000 for joint accounts).
The only thing to watch is that some brands share a licence, meaning the limit is shared.
Money Saving Expert, the site founded by BBC and ITV star Martin Lewis, said: “With easy-access accounts, you pay cash into them, then they pay you interest while the money’s in the account and you can withdraw whenever you want – useful if you’ll need to dip into them regularly”