The Bank of England is widely expected to cut the base rate by 0.25 percentage points to 4 per cent on Thursday, the lowest rate since March 2023.
It’s bad news for savers as the rate on your easy-access accounts – both Isas and ordinary – will fall.
In fact, this has already started with providers cutting rates or withdrawing top-paying accounts.
Last week Coventry Building Society, the second largest building society in the UK, closed its Four Access Saver at 4.5pc to new savers while Secure Trust shut its easy-access account at 4.4pc replacing it with a new version at 4.2pc.
App-based Sidekick announced its easy-access rate will fall from 3.95pc to 3.7pc on August 8, while Ford Money has cut its Flexible Saver rate from 4.35pc to 4.18pc.
But even if the Bank of England doesn’t cut, you aren’t safe.
Providers can change variable account rates whenever they want, not just when base rate moves – and they do.
Under the Financial Conduct Authority’s rules they must tell you when they do so – but it is easy to miss an email or letter or persuade yourself the cut isn’t too bad.
Last week Coventry Building Society, the second largest building society in the UK, closed its Four Access Saver at 4.5pc to new savers
That is a sure-fire way of not making the most of your savings.
And there is another trick to watch out for, which could leave you with money sitting in a low-rate duplicate savings account when you think you are in a newer deal offering more interest.
Providers have a nasty habit of launching new accounts with rates that grab your attention. They often come with similar names to a previous account, or the same name and a different issue number.
That number is all important because providers often pay different rates on different issues. And it is those in older accounts who miss out.
It’s a growing problem. There are 2,177 closed easy-access ordinary and cash Isa accounts, data scrutineer Moneyfacts says, up from 2,089 a year ago.
Providers hope you won’t notice which issue you are in and so can get away with paying you less interest.
Last week Charter Savings Bank cut rates on its old easy-access accounts.
The current issue on sale now, Easy Access Issue 62, at 4.36pc is a competitive rate – but In older issues you earn as little as 3.35pc.
Even if the Bank of England, led by Andrew Bailey, pictured, doesn’t cut the base rate, you aren’t safe as providers can change variable account rates whenever they want
It is the same with cash Isas. Charter’s current offering (Issue 61) pays 4.4pc but older issues pay as little as 3.77pc.
Kent Reliance has a headline rate of 4.41pc on its Easy Access Saver 82 currently on sale. But in older issues you can be earning as little as 3.2pc. And it is not just very old accounts which come off worse. The list goes on and on.
Among the lowest payers is Virgin Defined Access Cash E-Isa issue 34 and its Defined Access E-saver. Its current issues offer 4.06pc.
Not a top rate, but not too bad. But some of its older issues pay as little as 1.75pc.
Cahoot Simple Saver, Issue 10, which is currently on sale, pays a near top 4.55pc. But issue 6 on sale last autumn pays just 3pc. The rates only last a year. Once you have been in the account for a year, the bank moves your money into Cahoot Savings Account which pays just 1pc.
The lesson here is to check your account and what it pays, then check the best buy savings rates in Star Buys below and at thisismoney.co.uk/save and move your money to a better rate.
Fixed-rate cash Isas holding up
Fixed rate cash Isas are holding up well, even as rates elsewhere are cut. Newer banks are fighting for their share of money flowing into these tax-free accounts.
Last week, Cynergy Bank raised its rate for a one-year fixed rate term to a top 4.3 pc. It is followed by Charter Savings Bank, Tembo and Vanquis Bank at 4.27pc while Vida Savings pays 4.25pc. Paragon Bank have a 15-month account at 4.28pc.
These banks all offer £85,000 protection on your money under the Financial Services Compensation Scheme in the same way as bigger well-known banks.
Their rates are much better too. Last week Halifax and Lloyds cut their rates to a lowly 3.6pc for one year. Don’t settle for those low rates.
Are we losing patience with Premium Bonds?
The number of Premium Bonds eligible for this month’s draw only increased by just over 213million, a massive fall compared to the 733million in June and 841million in March.
In March the prize draw fund stood at 4pc but was cut to 3.8pc in June and again to 3.6pc this month.
Premium Bonds paid out just under £396.5million in prizes this week in the August draw. That’s 5pc less that the £417.7million in July.
But the number of prizes dished out this month was around 10,000 more that in July.
NS&I did this by cutting the number of larger prizes and increasing the number of £25 prizes – the smallest – by over 360,000.
The number of £100 and £50 prizes fell by 174,000 a piece while there were over 2,500 fewer £500 prizes. The number of larger prizes also fell by 1,100. Only the two £1million jackpots were left unscathed.
