Anyone with £10,000 savings given £300 warning to act today over Bank of England change
Financial gurus have urged individuals to act immediately as the Bank of England is anticipated to slash interest rates to four per cent tomorrow (Thursday), suggesting it could result in a £300 difference for savers.
A finance specialist has cautioned that those who don't move swiftly may find themselves shut out from the competitive rates currently available on savings accounts for months or even years. Some analysts predict that the Bank of England might further decrease interest rates to 3.5 per cent by the end of 2025.
One expert warns that failing to transfer £10,000 today could lead to 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.
We're at a tipping point where savings accounts still offer rates above 5.5 per cent, but those deals are likely to vanish fast. ""In fact, recent analysis by Moneyfacts has revealed that switching £10,000 into an account with a top interest rate now, could earn the saver more than £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. "
While all savers should shop around for the best deals, Antonia cautions that procrastination could lead to missed opportunities. She also highlighted the top accounts currently available. Antonia stated: "Banks are quick to adjust interest rates on savings accounts downwards, usually much faster than they increase.
Most people are unaware of how quickly savings rates change. "She further advised: "The public should act quickly.
The top interest rate outside of a Cash ISA is currently six per cent at Santander; however, this is a bonus rate with restrictions that savers should make themselves aware of. ''.
"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."
Lastly, Antonia emphasised the significance of utilising an ISA allowance to help individuals save 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."
In anticipation of the Monetary Policy Committee's base rate decision tomorrow, Investec Save has forecast a reduction in the Bank of England base rate, which is expected to prompt savers to opt for fixed rate products to secure the most favourable returns . Further rate cuts are also predicted to persist into the second half of this year and through to 2026.
Economists at Investec Bank project that the Bank of England base rate, currently at 4.25%, will drop to 3.75% by the end of 2025. They foresee a continued decline in rates, with expectations set for a dip to 3% by summer 2026.
Research from Investec Save indicates that nearly two-fifths of savers (37%) are planning to transfer their funds to fixed rate savings accounts this year in reaction to potential cuts to the Bank of England base rate. On average, those intending to move their money into fixed rate accounts are looking to shift £15,800 into such savings.
Phil Shaw, Chief Economist at Investec, commented: "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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