Business rates are a tax charged on most commercial properties, such as shops, offices, pubs, and warehouses.Credit: Getty
At the time, the Government proposed raising business rates on the biggest retail properties with values over £500,000.
This would allow for a discount on rates for small retail and hospitality premises to be permanent.
The government has not yet set the rates, but changes are due to take effect in April 2026.
But the Co-op is now urging the Government to commit to the maximum levels of relief for smaller stores in the upcoming Autumn Budget on November 24.
Research conducted by the supermarket found one in eight small high street business owners will be at risk of shutting down if reforms are not delivered.
A further 10% of small said they would need to lay off staff.
Shirine Khoury-Haq, Co-op group chief executive, said: “The proposed system would improve the financial situation of 99% of retailers.
“How much they are protected from tax rises depends on decisions made in this Budget. To boost local economies, create jobs and provide community cohesion, we need inclusive growth.”
“That means supporting the businesses on the corners, in the precincts, on the parades and the high streets of every community.
” In order for them to not only survive, but to thrive, the government has to commit to the maximum levels of relief.”
JD Sports Shuts 13 Stores Amid Sales Slump: What’s Next for the High Street?
It comes as many larger retailers have voiced concerns over plans to increase business rates on larger stores, arguing the move could make them unprofitable or lead to price hikes.
In August, a letter signed by Morrisons, Aldi and JD Sports, warned that further tax rises on businesses could result in the Labour government breaking its manifesto pledge to provide “high living standards”.
It reads: “As retailers, we have done everything we can to shield our customers from the worst inflationary pressures but as they persist, it is becoming more and more challenging for us to absorb the cost pressures we face.”
Many businesses have already seen their labour costs rise thanks to the rate of employer national insurance being increased in last year’s Budget.
The Treasury expects the new rates system will only impact the top 1% of properties.
A Treasury spokesperson said: “We are creating a fairer business rates system to protect the high street, support investment, and level the playing field by introducing permanently lower tax rates for retail, hospitality, and leisure properties from April that will be sustainably funded by a new, higher rate on less than 1% of the most valuable business properties.
“Unlike the current relief for these properties, there will be no cash cap on the new lower tax rates, and we have set out our long-term plans to address ‘cliff edges’ in the system to support small businesses to expand.”
RETAIL PAIN IN 2025
The British Retail Consortium has predicted that the Treasury’s hike to employer NICs will cost the retail sector £2.3billion.
Research by the British Chambers of Commerce shows that more than half of companies plan to raise prices by early April.
A survey of more than 4,800 firms found that 55% expect prices to increase in the next three months, up from 39% in a similar poll conducted in the latter half of 2024.
Three-quarters of companies cited the cost of employing people as their primary financial pressure.
The Centre for Retail Research (CRR) has also warned that around 17,350 retail sites are expected to shut down this year.
It comes on the back of a tough 2024 when 13,000 shops closed their doors for good, already a 28% increase on the previous year.
Professor Joshua Bamfield, director of the CRR said: “The results for 2024 show that although the outcomes for store closures overall were not as poor as in either 2020 or 2022, they are still disconcerting, with worse set to come in 2025.”
Professor Bamfield has also warned of a bleak outlook for 2025, predicting that as many as 202,000 jobs could be lost in the sector.
“By increasing both the costs of running stores and the costs on each consumer’s household it is highly likely that we will see retail job losses eclipse the height of the pandemic in 2020.”
Big business is already warning of the folly of this outdated 1970s-style approach.
Don’t do it, Chancellor.
Labour peer: Lawyer Starmer’s got to get with it, scrap the ECHR and put the navy in the channel – or he’s gone
Action, not talk
NEW Home Secretary Shabana Mahmood says she will not allow migrants to avoid deportation through bogus last minute claims that they are the victims of modern slavery.
She insists these “vexatious” appeals make a mockery of our laws.
HOUSEHOLDS across the country are being warned to brace for a financial squeeze as the cost of government borrowing skyrockets to levels not seen since 1998.
This now directly threatens to push up mortgage rates and could usher in a new wave of tax hikes.
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The rise in government borrowing costs is putting serious pressure on household budgets in two key waysCredit: Getty
The pound has tumbled in response to the growing unease, highlighting investor concern over the UK’s economic stability.
At the heart of the issue are government bonds, known as “gilts,” which the government issues to borrow money.
These bonds offer investors a return, referred to as the “yield.”
In recent weeks, gilt yields have been rising rapidly, making it more expensive for the government to borrow.
This morning, yields soared further, with 30-year gilts reaching 5.72% – the highest level in nearly 30 years – while 10-year gilts climbed to 4.85%.
This spike signals that investors are nervous.
They are demanding a higher return to lend to the UK, worried about stubborn inflation and a gaping £51billion hole in the nation’s finances.
The rise in government borrowing costs is putting serious pressure on household budgets in two key ways
Firstly, it’s driving up mortgage rates.
The link between government gilt yields and mortgage rates is direct and unavoidable.
Lenders use “swap rates,” which closely track gilt yields, to set the prices of fixed-rate mortgage deals.
As these rates climb, fixed mortgages become more expensive.
Since August 1, two-year swaps have risen from 3.56% to 3.74%, while five-year swaps have gone from 3.63% to 3.83%.
Major lenders like Barclays have already started increasing rates, and even a small rise can add significantly to monthly payments on a typical £200,000 mortgage.
With swap rates continuing to rise in recent weeks, experts warn that mortgage rates are likely to increase further.
Separately, Chancellor Rachel Reeves faces a difficult challenge in her Autumn Budget, scheduled for November.
Higher borrowing costs are eating into public funds, and many economists believe tax increases will be necessary to fill the financial gap.
Although the government has promised not to raise income tax, national insurance, or VAT for “working people,” other tax measures are reportedly being considered.
One proposal is applying National Insurance to rental income, which critics fear could result in landlords passing on the cost to tenants through higher rents.
Another idea being debated is replacing stamp duty with an annual property tax, which could affect homeowners.
There are also rumours of reducing pension tax relief or cutting the tax-free lump sum, moves that could generate billions but might hurt savers.
Plus, there’s speculation about lowering the VAT threshold, which would bring more small businesses into the tax system.
This could increase their costs and potentially lead to higher prices for consumers.
Reeves is expected to make economic growth the centrepiece of her next Budget, warning that Britain’s economy is “stuck” and in need of bold solutions.
What can you do about it?
None of the proposed changes have been confirmed yet, and the government hasn’t ruled them out either.
However, any new measures won’t take effect until after the Budget in November.
It’s important not to make rash decisions based on speculation.
If changes are announced, you’ll have time to act and protect your finances before they come into effect.
For instance, if stamp duty is replaced by an annual property tax from a certain date, you could move house before the deadline to avoid the extra cost.
Similarly, if the government introduces capital gains tax on high-value properties, you might consider downsizing to a smaller home before the change is implemented.
Rob Morgan, chief analyst at Charles Stanley, said: “Taking pre-emptive action can outright backfire.
“Last year some people were concerned about restrictions around taking tax free cash from pension and took withdrawals they wouldn’t have otherwise made.
“This removed the money from a tax-efficient environment and potentially stored up tax issues that will come back to haunt them.
“Instead, it’s best to wait to see what happens, consider the consequences, and take advice as required before acting.”
Most of the proposed measures are likely to affect only the very wealthy, so you may not be impacted at all.
If you’re concerned, there are steps you can take to prepare and safeguard your finances.
Check your financial health
If you are worried about your finances then you should speak to a financial adviser.
They will be able to offer you advice about your situation and explain if any of the measures will affect you.
You can find one using unbiased.co.uk – but remember, you will pay a fee.
It’s good practice to sit down and take stock of your finances every six months and work out a plan.
Work out all your bills and outgoings and what income you have and factor in any changes, such as bills going up or new income streams.
Think about what you need to do to make the most of your money. For example, do you need to prioritise paying off debts or saving for a house deposit.
If your mortgage deal is coming to an end soon, act now.
Locking in a fixed rate could shield you from rising rates and market uncertainty.
Aaron Strutt, of mortgage broker Trinity Financial, said “For the moment there have not been significant price hikes but it’s probably worth locking in a mortgage rate if you are buying somewhere or due to remortgage, to try and keep away from any market turbulence.”
If you are coming to the end of a fixed deal, most lenders let you lock in a new rate up to six months beforehand, which can be worth doing.
If rates fall after you agree a new deal, some lenders will let you sign a new one at a lower rate.
How to get the best deal on your mortgage
IF you’re looking for a traditional type of mortgage, getting the best rates depends entirely on what’s available at any given time.
If you’re remortgaging and your loan-to-value ratio (LTV) has changed, you’ll get access to better rates than before.
Your LTV will go down if your outstanding mortgage is lower and/or your home’s value is higher.
A change to your credit score or a better salary could also help you access better rates.
And if you’re nearing the end of a fixed deal soon it’s worth looking for new deals now.
You can lock in current deals sometimes up to six months before your current deal ends.
Leaving a fixed deal early will usually come with an early exit fee, so you want to avoid this extra cost.
But depending on the cost and how much you could save by switching versus sticking, it could be worth paying to leave the deal – but compare the costs first.
You can also go to a mortgage broker who can compare a much larger range of deals for you.
Some will charge an extra fee but there are plenty who give advice for free and get paid only on commission from the lender.
You’ll also need to factor in fees for the mortgage, though some have no fees at all.
You can add the fee – sometimes more than £1,000 – to the cost of the mortgage, but be aware that means you’ll pay interest on it and so will cost more in the long term.
The average bank customer has around £10,000 in savings, according to Raisin.
If that £10,000 is kept in an easy access account earning 1.5% interest, it would generate just £150 in interest each year.
But switching to Cahoot’s 5% easy access account would boost that to £500, earning you an extra £350.
If your savings account pays less than the current inflation rate of 3.8%, it’s time to look for a better deal.
How can I find the best savings rates?
WITH your current savings rates in mind, don’t waste time looking at individual banking sites to compare rates – it’ll take you an eternity.
Research price comparison websites such as Compare the Market, Go.Compare and MoneySupermarket.
These will help you save you time and show you the best rates available.
They also let you tailor your searches to an account type that suits you.
As a benchmark, you’ll want to consider any account that currently pays more interest than the current level of inflation – 3.4%.
It’s always wise to have some money stashed inside an easy-access savings account to ensure you have quick access to cash to deal with any emergencies like a boiler repair, for example.
If you’re saving for a long-term goal, then consider locking some of your savings inside a fixed bond, as these usually come with the highest savings rates.
IF you’re wondering where your money’s going each month, it might not be big bills or bad luck to blame but small, repeated mistakes that add up fast.
From letting your savings sit in low-interest accounts, to underestimating the real cost of long mortgage terms, financial experts warn that common habits could be quietly emptying your bank accounts.
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Small, repeated mistakes could be the reason your bank balance is dwindlingCredit: getty
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Money experts revealed the biggest habits that are keeping people poorCredit: Getty
We asked money experts and behavioural scientists to reveal the biggest habits that are holding people back.
1. Not knowing what’s coming in and going out
It’s hard to feel in control of your money when you don’t know where it’s actually going.
Many people assume they have a rough idea, but the reality is that forgotten subscriptions, auto-renewing services and small daily purchases quickly add up.
Without visibility, your budget can slowly unravel, and by the time you realise, you’ve slipped into the red.
Vix Leyton, consumer expert at Thinkmoney, says the fix starts with routine: “Take time to know what your outgoings are and what is coming in.
“Some apps, like Thinkmoney, offer a snapshot of what you’re spending, and can even ringfence bill money for you so you don’t accidentally end up facing penalties and late fees.”
Even a five-minute weekly check-in can help avoid nasty surprises and highlight where cutbacks are needed.
2. Living without a savings buffer
It’s hard to save money – but not having a buffer can leave you exposed to high credit when you need cash quickly.
Whether it’s a broken boiler, a car that won’t start or a sudden cut in hours at work, not having a cushion means falling back on credit cards or payday loans just to stay afloat.
The result is a constant feeling of stress, and a budget that can be thrown off by the smallest shock.
Thomas Mathar, behavioural researcher and host of The Money:Mindshift Podcast, says a little slack goes a long way.
He said: “Even a modest buffer, like one month’s rent, can give you the breathing space to make better decisions and avoid high-cost debt.
“It’s not just about the numbers, it’s about having mental and financial slack when life throws you a curveball.”
3. Letting debt pile up month after month
More and more people have credit card debt, which means it can be easy to think it’s business as usual, especially when the minimum payments are low.
But ultimately, you’re paying interest to the bank instead of putting that money toward your own goals. Over time, that can add up to hundreds or even thousands of pounds in lost savings.
“Too many people accept credit card debt as a normal state of affairs. It’s not,” says Mathar.
I’ve made over £56k with a side hustle anyone can do – skint people must stop being scared and should try something new
“Paying down high-interest debt quickly is one of the most powerful things you can do for your long-term well being. It’s buying yourself back freedom, and peace of mind.”
If you’re juggling multiple debts, focus on the most expensive ones first and look into 0% balance transfer options if your credit score allows.
4. Having psychological armour to support you
In the age of side hustles and flashy online success stories, it’s tempting to ditch steady work for riskier pursuits.
But without a reliable income it’s hard to build long-term security.
Inconsistent earnings often mean falling behind on bills, using credit to bridge the gap, and struggling to plan ahead.
Mathar warns that it’s important to have some sort of regular income, even if you’re pursuing other hustles on the side.
He says: “A steady income isn’t just about covering bills, it’s psychological armour.
“When you’re living month-to-month or under-earning compared to your potential, the stress compounds.
“You don’t need to chase big money, but you do need income that’s ‘good enough’ to support a resilient, happy life.”
5. Leaving savings in a dead-end account
You might feel good about putting money aside, but if it’s sitting in an easy-access account earning barely any interest, your savings are losing value in real terms.
With inflation still high, the cost of leaving cash in low-yield accounts is higher than many realise.
Adam said: “The likes of HSBC, Lloyds Bank, Santander, NatWest and Barclays all have easy access accounts paying around 1.1 to 1.2 per cent interest, far below the typical returns savers could expect, which is currently 3.51 per cent.”
The top performing options can pay even more, and shopping around and switching accounts only takes a few minutes online.
How to effectively manage your money
Kara Gammell, finance expert at MoneySuperMarket, gives tips on how to get a handle on your finances so you have more left for saving,
If you’re struggling to get a grip on your finances, the way to start is to do a proper inventory.
Try Emma, the money management app, which uses open banking to combine information from all your bank accounts, savings accounts and credit cards, plus investments. The app then highlights any wasteful subscriptions and costly debt and helps streamline your savings.
What’s more, it analyses your personal finances and recommends ways to conserve money so that you can get on track financially more easily than ever.
If you want to have a deep dive into your spending habits, go through your bank statement at the end of each month and give every purchase a rating of one, two or three.
Mark with a ‘one’ any purchases that didn’t make you feel good; give a ‘two’ rating to things that felt ‘sort of good but indifferent’; and mark with ‘three’ any purchases that you would make all over again in a heartbeat.
You’ll be surprised by what you learn.
Monitor your credit report
From overdrafts to loans, credit cards, mobile phones and mortgages, it can be hard to keep track of your finances, and it can be all too simple to find yourself in the dark about how much debt you have in total.
But this information forms your credit score, which is used by lenders to determine whether you’ll be offered competitive rates and offers for financial products, or even whether you will even be accepted when you make an application.
I’m automatically notified when my credit report is updated monthly, which can be a huge help in avoiding any financial problems from spiralling and means I always know what my overall financial situation is.
The tool also suggests ways to improve your credit score, so you’re more likely to be offered competitive interest rates, which helps you save money in the long run.
6. Not making the most of your ISA allowance
More savers than ever are being hit with tax bills they could have avoided.
Frozen tax thresholds mean that even modest savers can end up over the personal savings allowance, paying tax on any interest they earn.
That means, if you’re not using your ISA allowance, you’re potentially giving money away for free.
French explains: “Saving and investing are some of the best ways to build wealth over time.
“But it’s important that savers are aware of their tax liability on any profits they make – which can add up over the course of a few years.
Plenty of savers can avoid this tax bill by making use their yearly ISA allowances.
You can save or invest up to £20,000 a year tax-free, and every pound sheltered from tax is a pound that keeps working for you.
7. Only saving for retirement, and nothing else
Putting money into a pension is smart, but it shouldn’t be your only savings plan.
Many people now take career breaks, retrain, care for relatives or start businesses, and those transitions need funding too.
Mathar says ignoring this reality can leave people exposed.
“We don’t live three-stage lives anymore – education, work, retirement… A ‘transition fund’ – even just a few months’ salary – makes those big life pivots possible without financial panic.”
8. Being too harsh on yourself when things go wrong
Money mistakes happen. But too often, people fall into a cycle of guilt and avoidance, especially if they’re already struggling.
That mindset can stop you from facing your finances or reaching out for help, which only makes things worse in the long run.
Mathar believes the solution starts with self-empathy. “Here’s the truth: we’re all a bit messed up when it comes to money.
Our brains are wired for short-term wins, not long-term planning.
The goal isn’t to be perfect with money; it’s to build enough slack, mental and financial, so that one mistake or setback doesn’t knock you flat.”
9. Not overpaying your mortgage when you could
With mortgage rates still high and household budgets under pressure, many borrowers are choosing longer terms to keep monthly payments manageable.
But unless you’re also making overpayments, that strategy can come at a serious long-term cost.
French says small changes now can lead to huge savings later: “Overpaying by £200 per month on that same £250,000 40-year mortgage could shave almost 13 years off the mortgage term, saving them around £123,000 in interest payments.
“This is all without being tied to having to consistently make higher payments every single month – boosting the flexibility of their budget and their financial resilience.”
Most lenders allow up to 10 per cent overpayment each year.
Even £50 a month can help you become mortgage-free sooner and pay far less in interest overall.
Top tips for becoming an ISA millionaire
SAVING into a stocks and shares ISA can help you build wealth faster over the long term than cash savings. Dan Coatsworth, investment analyst at savings platform AJ Bell, gives his advice…
Start as early as you can
Time in the market is important, not just so you can ride the market ups and downs but also to let your wealth build up.
Not everyone can afford to invest the full £20,000 ISA allowance each year, particularly younger people who might be on a lower salary.
The trick is to start as early as possible with what you can afford to invest. Increase your contributions as you get older, such as when you get a pay rise.
Maximise your contributions
Try to invest as much as you can each month once you’re sure all the essentials are covered.
Create a budget so you can pay bills in full and clear any expensive debt, such as personal loans or credit cards.
The remaining money can be used to fund your lifestyle and to top up your ISA.
Be consistent with contributions
Feeding your account on a regular basis means you get into the habit of squirrelling money away for your future.
After a while you get accustomed to that money going into your ISA that you may not even think about alternative uses for it, such as going shopping or down the pub with your friends.
Keep an eye on costs and charges
Costs can add up over time and eat into your returns. Try not to fiddle too much with your portfolio as trading in and out of investments incurs transaction charges.
It is important to be patient with investing, especially for someone hoping to be an ISA millionaire as the journey to build up this wealth could last for decades.
Having a diversified portfolio is good practice for any investor and essentially means keeping different types of investments to help balance out the risk.
Then if something goes wrong with one of your investments, you’ve got the rest to hopefully act as a cushion to minimise the pain.
Diversification can involve investing in different industry sectors, geographies and asset types. For example, a diversified portfolio might have exposure to shares, funds and bonds from around the world.
Companies and funds often pay dividends every three to six months.
Think of these as rewards for taking the risk of owning their shares or fund units. While it can be tempting to pocket that income stream to spend on yourself, history suggests one of the biggest contributors to investment returns is reinvesting dividends back into your account to grow wealth faster.
The decision means lowermortgagepayments for homeowners but often leads to smaller returns for savers.
That’s because the base rate impacts theinterest ratesbanks offer on savings accounts and loans, including mortgages.
The Co-operative Bank has wasted no time, announcing that interest rates on dozens of accounts will be reduced starting on August 14 and October 22.
On August 14, the Base Rate Tracker accounts will see reductions, with interest rates dropping from 4% to 3.75% and from 3.75% to 3.5%.
For example, if you had £1,000 deposited for 12 months, the interest earned at 4% would have been £40.
After the rate drops to 3.75%, you would earn £37.50 – a difference of £2.50.
Similarly, with the rate falling from 3.75% to 3.5%, the interest earned would decrease from £37.50 to £35, meaning £2.50 less over the year.
From October 22, various other accounts will experience cuts, including the Future Fund, which will see its rate fall from 1.53% to 1.46%, and the Online Saver, dropping from 2.12% to 2.06%.
Other affected accounts include the Smart Saver, Select Access Saver 5, and Privilege Premier Savings, with reductions ranging from 4.15% to 3.9% and 3.53% to 3.4%.
Switch bank accounts for free perks
Cash ISA holders will also be impacted, with Cash ISA 2 rates falling from 3.25% to 3%.
Fortunately, several savings providers still offer returns of up to 5%.
With the average bank customer holding around £10,000 in savings, according to Raisin, switching could be a smart move.
To help you get the best returns, we’ve listed the top savings rates for each account type below.
What types of savings accounts are available?
THERE are four types of savings accounts: fixed, notice, easy access, and regular savers.
Separately, there are ISAs or individual savings accounts which allow individuals to save up to £20,000 a year tax-free.
But we’ve rounded up the main types of conventional savings accounts below.
FIXED-RATE
A fixed-rate savings account or fixed-rate bond offers some of the highest interest rates but comes at the cost of being unable to withdraw your cash within the agreed term.
This means that your money is locked in, so even if interest rates increase you are unable to move your money and switch to a better account.
Some providers give the option to withdraw, but it comes with a hefty fee.
NOTICE
Notice accounts offer slightly lower rates in exchange for more flexibility when accessing your cash.
These accounts don’t lock your cash away for as long as a typical fixed bond account.
You’ll need to give advance notice to your bank – up to 180 days in some cases – before you can make a withdrawal or you’ll lose the interest.
EASY-ACCESS
An easy-access account does what it says on the tin and usually allows unlimited cash withdrawals.
These accounts tend to offer lower returns, but they are a good option if you want the freedom to move your money without being charged a penalty fee.
REGULAR SAVER
These accounts pay some of the best returns as long as you pay in a set amount each month.
You’ll usually need to hold a current account with providers to access the best rates.
However, if you have a lot of money to save, these accounts often come with monthly deposit limits.
What’s on offer?
If you’re looking for a savings account without withdrawal limitations, then you’ll want to opt for an easy-access saver.
These do what they say on the tin and usually allow for unlimited cash withdrawals.
The best easy access savings account available is from Cahoot, which pays 5% – and you only need to pay a minimum of £1 to set it up.
This means that if you were to save £1,000 in this account, you would earn £50 a year in interest.
Meanwhile, West Brom Building Society’s easy access account offers customers 4.55% back on savings worth £1 or more.
If you’re okay with being less flexible about withdrawals, a top notice account could be a great option.
These accounts offer better rates than easy-access accounts but still let you access your money more flexibly than a a fixed-bond.
RCI Bank UK’s 95 day notice account offers savers 4.7% back with a minimum £1,000 deposit, for example.
This means that if you were to save £1,000 in this account, you would earn £47 a year in interest.
Meanwhile, GB Bank’s 120-day notice account offers 4.58%, requiring a minimum deposit of £1,000.
If you want to lock your money away and keep the same savings rate for a set time, a fixed bond is a good choice.
The best fixed rate currently offered is Vanquis Bank’s one-year fixed bond, which pays 4.44%, requiring a minimum deposit of £1,000.
Meanwhile, Atom Bank’s one-year fixed bond offers 4.42% back on a deposit of £50 or more.
This means that if you were to save £1,000 in this account, you would earn £44.20 a year in interest.
If you want to build a habit of saving a set amount of money each month, a regular savings account could pay you dividends.
Principality Building Society’s Six Month Regular Saver offers 7.5% interest on savings.
It allows customers to save between £1 and £200 a month.
Save in the maximum, and you’ll earn £25.81 in interest.
While regular savings accounts look attractive due to the high interest rates on offer, they are not right for all savers.
You can’t use a regular savings account to earn interest on a lump sum.
The amount you can save into the account each month will be limited, typically to somewhere between £200 and £500.
Therefore, if you have more to save, it would be wise to consider one of the other accounts mentioned above.
How can I find the best savings rates?
WITH your current savings rates in mind, don’t waste time looking at individual banking sites to compare rates – it’ll take you an eternity.
Research price comparison websites such as Compare the Market, Go.Compare and MoneySupermarket.
These will help you save you time and show you the best rates available.
They also let you tailor your searches to an account type that suits you.
As a benchmark, you’ll want to consider any account that currently pays more interest than the current level of inflation – 3.4%.
It’s always wise to have some money stashed inside an easy-access savings account to ensure you have quick access to cash to deal with any emergencies like a boiler repair, for example.
If you’re saving for a long-term goal, then consider locking some of your savings inside a fixed bond, as these usually come with the highest savings rates.
A WARNING has been issued to savers missing out on hundreds of pounds ahead of a key Bank of England (BoE) decision this week.
People risk the cash blow because they’re leaving money in low-paying easy access accounts.
The latest data from Moneyfactscompare.co.uk reveals someone with £10,000 in savings could earn an extra £300 by switching to an account with a higher interest rate.
Adam French, from the comparison site, said savers were in danger of their hard-earned cash “languishing” by making the mistake.
“Simply switching a £10,000 savings pot away from a high street bank’s easy access account to a market-leading one-year fix can leave you £300 better off in 12 months’ time.
“Not a bad return for a few minutes’ work, if you aren’t going to need access to the money sooner.”
The warning comes ahead of the BoE’s Monetary Policy Committee (MPC) meeting on Thursday (August 7) where it will decide what to do with the base rate.
The base rate is charged to high street banks and other lenders and usually reflected in savings and mortgage rates.
Any fall is good news for mortgage holders who tend to see rates plummet, but it spells bad news for those with savings accounts.
The bank is widely expected to cut the base rate, which currently sits at 4.25%.
Six members voted to keep rates at the existing level while three members voted for a cut to 4%.
What is the Bank of England base rate and how does it affect me?
The BoE uses the base rate to control inflation, with a hike designed to discourage spending and keep prices in check.
The current Consumer Price Index (CPI) measure of inflation is 3.6%, over the BoE’s 2% target.
However, the MPC is under pressure to lower interest rates to get the stagnating economy growing.
How to make your savings work harder
You can’t do anything to control what the BoE does with the base rate, but you can make your savings work harder.
One way to do this is by locking your savings into a fixed-term account.
These accounts pay out an interest rate for a set period of time, from anywhere between six months and five years.
Fixed-rate savings accounts generally offer better interest rates in exchange for you not being to withdraw any cash.
Just bear in mind you may have to pay a charge for any early withdrawals.
Second, it’s worth making the most of ISAs which allow you to save money without having to pay tax on any interest earned.
You can spread a total of £20,000 across various ISA types including Cash ISAs and Stocks and Shares ISAs.
And of course, shop around for the best deals so you’re not left with a low-paying savings account.
Comparison sites like moneyfactscompare.co.uk and moneysavingexpert.com can help you find the best account suited to you.
How you can find the best savings rates
If you are trying to find the best savings rate there are websites you can use that can show you the best rates available.
Doing some research on websites such as MoneyFacts and price comparison sites including Compare the Market and Go Compare will quickly show you what’s out there.
These websites let you tailor your searches to an account type that suits you.
There are three types of savings accounts fixed, easy access, and regular saver.
A fixed-rate savings account offers some of the highest interest rates but comes at the cost of being unable to withdraw your cash within the agreed term.
This means that your money is locked in, so even if interest rates increase you are unable to move your money and switch to a better account.
Some providers give the option to withdraw but it comes with a hefty fee.
An easy-access account does what it says on the tin and usually allow unlimited cash withdrawals.
These accounts do tend to come with lower returns but are a good option if you want the freedom to move your money without being charged a penalty fee.
Lastly is a regular saver account, these accounts generate decent returns but only on the basis that you pay a set amount in each month.
SANTANDER is slashing interest rates for two of its savings accounts from today – and customers should check if they’re affected.
The major bank is cutting savings rates from June 3 (today) on its Good for Life ISA and Rate for Life accounts.
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Santander is slashing interest rates for two of its savings accountsCredit: Getty
The interest rate on the Good for Life ISA account will drop from 4.5% to 4.25%, while the rate for the Rate for Life account will drop from 4.75% to 4.5%.
Those who have saved less than £1,000 in the Rate for Life account will still continue to earn the same rate (1%) on these balances.
It comes after the Bank of England (BoE) cut the base rate from 4.5% to 4.25% last month – the fourth cut since 2020.
The base rate is used by banks to determine the interest rates offered to customers on savings and borrowing costs.
Read more on bank accounts
While a rate cut is good news for borrowers, it’s usually bad news for savers, who will usually see savings rates fall when the base rate is cut.
This means they will earn less on their cash.
For example, the average easy access savings rate was 2.78% on May 8, when the base rate was cut.
Now it has dropped to 2.72%, according to comparison site Moneyfacts.
Santander is not the only bank cutting rates on savings accounts. HSBC has also cut rates on eight of its savings accounts today.
Nationwide Building Society cut savings rates on 63 of its accounts on Sunday, from easy-access ISAs to children’s accounts.
Santander’s £130 Million Recovery: What You Need to Know
NatWest cut savings rates on four of its accounts last Friday.
Meanwhile, rates on three of its savings accounts and a kids’ current account will be slashed from July 15.
How to get the best savings rate
As savings rates tumble, now is a good time to check what the interest rate is on your existing account.
Around £280billion is sitting in accounts paying zero interest, according to latest data from the BoE.
If you have an interest rate below the rate of inflation – which is currently 3.5% – then consider moving your money elsewhere, otherwise the spending power of your savings is eaten away.
The best easy access savings rate (based on a balance of £1,000) is offered by Atom Bank at 4.5 per cent.
Experts are predicting that more cuts to the base rate this year are likely, so it may be worth considering locking up your money in a fixed rate savings account if you can afford to do so.
The best one year fixed rate savings account is offered by Hampshire Trust Bank at 4.45%.
However, be aware that you usually can’t make withdrawals out of fixed term savings accounts, even in an emergency.
Anne Bowes from The Private Office said: “Review your savings accounts and switch if you are being paid an uncompetitive rate.
“Double check the terms and conditions of any account you are looking to open – or indeed close – as some accounts may have very short-term bonuses or restricted access.
“That means you might not earn as much interest as you hoped, or get hold of the money in as timely a manner as you were expecting.”
How to switch banks
For customers not happy with the latest shake-up, you may want to consider switching banks.
Switching bank accounts is a simple process and can usually be done through the Current Account Switch Service (CASS).
Dozens of high street banks and building societies are signed up – there’s a full list on CASS’ website.
Under the switching service, swapping banks should take seven working days.
You don’t have to remember to move direct debits across when moving, as this is done for you.
All you have to do is apply for the new account you want, and the new bank will tell your existing one you’re moving.
There are a few things you can do before switching though, including choosing your switch date and transferring any old bank statements to your new account.
You should get in touch with your existing bank for any old statements.
When switching current accounts, consider what other perks might come with joining a specific bank or building society.
Some banks offer 0% overdrafts up to a certain limit, and others might offer better rates on savings accounts.
And some banks offer free travel or mobile phone insurance with their current accounts – but these accounts might come with a monthly fee.
Where to find the best savings rates
Many savings accounts offer miserly rates meaning that money is generating little or no return.
However, there are ways to get your cash working hard. Sun Savers Editor Lana Clements explains how to make sure you money is getting the best interest rate.
Easy access savings accounts offer flexibility for customers, meaning they can dip in and out of cash when needed. However, the caveat is that rates can change at any time.
If you’re keeping your money in an easy access account, you’ll need to keep checking whether it’s the best paying account for your circumstances and move if not.
Check in at least once a month to see what is happening in the market.
Check what is offered by your bank – sometimes the best rates are for customers only.
But do search the wider market as often top savings accounts are offered by lesser known providers.
Comparison sites are a good place to check for the top rates. Try Moneyfactscompare.co.uk or Moneysupermarket.
You can search by different account type. You’ll usually get a better interest rate if you can lock your money away for a fixed amount of time, but it’s always a good idea to keep some money in an easy access account in case of emergencies.
Don’t overlook regular savings accounts often pay some of the best rates, but you’ll need to commit to monthly payments. This can be a great way to get into a savings habit while earning top rates at the same time.
The base rate is the rate charged by the BoE to smaller high street banks on loans, with any fall usually mirrored in savings rates.
Newcastle Building Society is reducing rates on the 37 personal savings accounts by 0.25 percentage points.
The Double Access Saver/ISA (Issue 4) will drop from 4.05% to 3.80%, for customers eligible for a bonus interest rate.
Meanwhile, the Newcastle Cash Lifetime ISA (Issue 3) will fall from 2.70% to 2.45%.
The Newcastle Junior Cash ISA will be cut from 3.75% to 3.50% and the Regular Saver Plus from 2.50% to 2.25% for anyone receiving the bonus interest rate.
Customers with fixed-rate savings accounts won’t see interest rates fall from June 5.
Interest rates on two variable rate savings accounts – the Loyalty Saver (Issue 1) and Quadruple Access Saver/ISA (Issue 1) – will also not change as they have only been available to customers since April 24.
You can view the table above to find out how the interest rate on your savings account has changed.
Or, you can visit www.newcastle.co.uk/savings/manage-your-savings-account/interest-rates and click on “Current and Closed Issue Variable Savings Interest Rates”.
What is the Bank of England base rate and how does it affect me?
The Sun asked Newcastle Building Society to comment.
MAJOR BANKS CUTTING RATES
A host of banks are reducing interest rates on savings accounts as the BoE continues to cut its base rate.
It comes after the BoE cut its base rate from 4.50% to 4.25% on May 8.
The central bank raises its base rate to discourage people from spending and encourage them to save, which in turn is designed to make inflation fall.
It lowers its base rate when inflation is under control, meaning people are encouraged to spend and pump money into the economy.
A lower base rate signals good news for those with mortgages who see the interest rates charged on them fall.
However, it’s usually bad news for those with savings accounts as banks slash interest rates.
If you’ve got a savings account with an interest rate set to drop, it might be worth shopping around for a better deal now.
Check out comparison sites like moneysavingexpert.com and moneyfactscompare.co.uk to browse the best out there.
According to Moneyfacts, Chip is offering the best rate on an easy access savings account, with a rate of 4.77%.
Meanwhile, the best easy access cash ISA is also with Chip and offering a rate of 4.99%.
Always look beyond just the headline interest rate on any savings account though.
Some offer additional perks which can make them more cost-effective and suited to you, based on your circumstances.
For example, some offer you access to free TV subscriptions or cheaper or free cinema tickets.
Different types of accounts pay out interest at different times too while others will offer a bonus interest rate which falls after a set period.
Some savings accounts penalise you for making withdrawals over a certain limit.
Meanwhile, ISAs can be effective for saving cash as any interest earned on them is tax-free.
Read more below about the different types of savings accounts and what they offer.
SAVING ACCOUNT TYPES
THERE are four types of savings accounts fixed, notice, easy access, and regular savers.
Separately, there are ISAs or individual savings accounts which allow individuals to save up to £20,000 a year tax-free.
But we’ve rounded up the main types of conventional savings accounts below.
FIXED-RATE
A fixed-rate savings account or fixed-rate bond offers some of the highest interest rates but comes at the cost of being unable to withdraw your cash within the agreed term.
This means that your money is locked in, so even if interest rates increase you are unable to move your money and switch to a better account.
Some providers give the option to withdraw, but it comes with a hefty fee.
NOTICE
Notice accounts offer slightly lower rates in exchange for more flexibility when accessing your cash.
These accounts don’t lock your cash away for as long as a typical fixed bond account.
You’ll need to give advance notice to your bank – up to 180 days in some cases – before you can make a withdrawal or you’ll lose the interest.
EASY-ACCESS
An easy-access account does what it says on the tin and usually allows unlimited cash withdrawals.
These accounts tend to offer lower returns, but they are a good option if you want the freedom to move your money without being charged a penalty fee.
REGULAR SAVER
These accounts pay some of the best returns as long as you pay in a set amount each month.
You’ll usually need to hold a current account with providers to access the best rates.
However, if you have a lot of money to save, these accounts often come with monthly deposit limits.
Do you have a money problem that needs sorting? Get in touch by emailing [email protected].
