The Bank of England is expected to cut interest rates to four per cent on Thursday, February 26 – and experts are warning that it could mean a loss of £300 for savers
Savers are being told to take action today as Bank of England set to change interest rates(Image: georgeclerk via Getty Images)
Financial gurus are urging individuals to take immediate action as the Bank of England is expected to cut interest rates to four per cent tomorrow (Thursday), indicating a potential £300 difference for savers.
A finance expert has warned that those who don’t act promptly could find themselves excluded from the competitive rates currently offered on savings accounts for months or even years. Some analysts forecast that the Bank of England may further reduce interest rates to 3.5 per cent by the end of 2025.
One specialist cautions that failing to transfer £10,000 today could result in an annual loss of £300. Antonia Medlicott, Managing Director of financial education specialists Investing Insiders, stated: “Savers risk missing out on hundreds a year in interest if they delay.
Savers have been warned(Image: Getty)
“We’re at a tipping point where savings accounts still offer rates above 5.5 per cent, but those deals are likely to disappear quickly. In fact, recent analysis by Moneyfacts has shown that transferring £10,000 into an account with a top interest rate now, could earn the saver over £300 extra a year compared to the average rate within an ISA, which currently stands at just 2.7 per cent.
“Savers currently earning under 4.5 per cent are urged to switch now to prevent leaving money on the table, with economists currently predicting further cuts in November, possibly reaching as low as 3.5 per cent by the end of this year,” reports the Mirror.
While it’s crucial for all savers to hunt for the best deals, Antonia warns that dilly-dallying could result in missed opportunities. She also spotlighted the top accounts currently on offer.
Antonia remarked: “Banks are quick to adjust interest rates on savings accounts downwards, usually much faster than they increase.”
The majority of people are oblivious to how rapidly savings rates can fluctuate. She further advised: “The public should act swiftly.
“The highest interest rate outside of a Cash ISA is presently six per cent at Santander; however, this is a bonus rate with restrictions that savers should familiarise themselves with.
“Within a Cash ISA, the top rate is currently 5.44 per cent with CMC Invest, which is still excellent, and the advantage with this account is that any gains are sheltered from tax.
“ISA uptake and switching rates are lowest in parts of the North West, Wales, and East Midlands, leaving Brits in these areas particularly vulnerable to falling rates this week.”
Finally, Antonia underscored the importance of utilising an ISA allowance to aid individuals in saving more effectively. She added: “Remember to utilise ISA allowances as cuts to Capital Gains Tax allowance will mean more and more people are pulled into paying tax. This is especially true for higher-rate taxpayers who are urged to prioritise ISAs over standard savings accounts due to the reduced rate on the personal allowance.”
Interest rates are expected to change(Image: PA Wire)
Ahead of tomorrow’s Monetary Policy Committee base rate announcement, Investec Save has predicted a drop in the Bank of England base rate, which is anticipated to encourage savers to choose fixed rate products to lock in the best possible returns. Additional rate reductions are also expected to continue throughout the latter half of this year and into 2026.
Financial analysts at Investec Bank anticipate that the Bank of England base rate, presently standing at 4.25%, will fall to 3.75% by the close of 2025. They predict a sustained downward trend in rates, with projections suggesting a decline to 3% by summer 2026.
Studies conducted by Investec Save reveal that almost two-fifths of savers (37%) are preparing to move their money into fixed rate savings accounts this year in response to potential reductions to the Bank of England base rate. On average, those planning to transfer their funds into fixed rate accounts are looking to move £15,800 into such products.
Phil Shaw, Chief Economist at Investec, remarked: “We predict a higher number of savers to move their money into fixed rate products as they look to secure attractive returns before anticipated further cuts to the Bank of England base rate.
“The base rate has already been cut four times since last summer, and we anticipate that it will fall further still in the second half of 2025 and into 2026. Savers are looking to act now to secure a higher rate and the peace of mind that their money is working hard for them.”
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