Following the Bank of England announcing it’s cutting the base rate, Martin Lewis has warned UK savers of a ‘tipping point’ for their hard-earned cash.
Last week, interest rates were chopped from 4.5% to 4.25% – and the Money Saving Expert (MSE) founder reckons now could be the moment to lock in a fixed rate.
In the latest edition of his newsletter, Martin says that in recent months, the top easy-access variable savings rates (where you can deposit money and take it out as you need it) have generally trumped fixed savings.
These involve locking money away to access a set interest rate – generally around 4.5%.
But now, the tide is starting to turn.
According to Martin, banks’ fixed rate offers are typically based on a long-term view of the market rather than the current UK base rate. And not only are they already low, City analysts anticipate they’ll drop further – to between 3.25% and 3.5% by the end of the year, or as one expert estimates, as little as 2.75% in the first half of 2026.
Should you lock your cash in a fixed rate savings account?
The current top fixed rates are higher than where the base rate is projected to go, and if predictions do come true, Martin claims ‘today’s 4.5% fixes may rapidly end up paying more than top future easy-access rates.’
He highlights that fixed rate options also ‘give the boon of certainty’,adding: ‘If you’re concerned, the safest option, based on the mood music, is to lock in a rate by putting some savings in fixes.’
Keep in mind though, it’s not a guaranteed ‘win’, and you can’t access your cash while for the fixed period, except in the case of certain fixed cash ISAs.
Best fixed rate savings accounts
If you’re not sure about making the commitment, the MSE founder suggests opening a fixed rate savings account now without depositing any money.
Most accounts give you two weeks to put some cash in – giving you some time to watch ‘what happens to other rates to see whether it’s worth it.’
‘If you then decide it isn’t right for you, just don’t put the money in,’ Martin adds.
At the moment, MSE finds that the best fixed savings accounts are as follows:
- 1-year: Conister 4.52%, minimum £5,000/Cynergy 4.5%, minimum £1,000
- 2-year: GB 4.43%, minimum £1,000/Secure Trust 4.42%, minimum £1,000
- 3-year: Secure Trust 4.42%, minimum £1,000/Birmingham 4.41%, minimum £5,000
- 5-year: Secure Trust 4.42%, minimum £1,000/Birmingham 4.41%, minimum £5,000.
Not sure how long to fix for? Martin recommends considering just how long you can ‘comfortably’ lock away the money, as well as how much you value knowing exactly what’s going on with the interest on your savings – the more you do, the ‘longer you should fix.’
As for cash ISAs, while they can be a good choice if you need easy access to your money, it’s worth bearing in mind that these accounts typically charge a penalty of 90 to 365 days in interest if you make a withdrawal.
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