About these figures: savings rates are Bank of England monthly averages of quoted rates on new household savings accounts, including unconditional bonuses (series IUMB6VJ, IUMWTFA and IUMZID2), downloaded on 14 October 2026. They're market averages, not best-buy rates, and the Bank may revise recent months. Inflation is CPI from the Office for National Statistics (ONS). Moneyfacts publishes its own averages, which are calculated differently, so its figures won't match these exactly.

After more than a decade of historically low rates, the Bank of England raised the Bank Rate 14 times between December 2021 and August 2023, taking it from 0.1% to a peak of 5.25%. That pushed savings rates to their highest levels in many years. The Bank began cutting in August 2024 and reached 3.75% in December 2025. On 5 November 2026 it raised the rate to 4%, its first increase since August 2023, as the Middle East conflict pushed up energy prices and inflation.

Savings rates haven't all followed the same path as the Bank Rate:

*August 2026, the latest figure available. September CPI is published on 21 October. Spreads use August 2026 CPI for September 2026 and are before tax. Sources: Bank of England (Bank Rate; series IUMB6VJ, IUMWTFA, IUMZID2); ONS (CPI, series D7G7). Changes and spreads are our calculation.

August 2024 wasn't the peak for savings rates. Rates were higher in autumn 2023: in September 2023, Moneyfacts reported an average one-year fixed bond rate of 5.34%, and the Bank of England's average two-year fixed cash ISA rate was 5.39%.

What the "real" return spread means

The real return spread is the average interest rate minus inflation. When it's positive, savings grow faster than prices on average. When it's negative, savings lose spending power even though the balance grows. In August 2024, all three average rates were above inflation. In September 2026, average fixed rates were still above inflation, but the average instant-access rate was about one percentage point below it.

The spreads are before tax. Interest in a cash ISA is tax-free; interest on other accounts may be taxed above your Personal Savings Allowance, which reduces the real return.

What's changed

Easy-access rates have fallen. The average instant-access rate fell from 2.73% in August 2024 to 2.20% by December 2025, and has stayed close to 2.1% through 2026 (2.06% in September). With inflation higher than in 2024, the average easy-access rate is now about one percentage point below inflation.

Fixed rates dipped, then rose. Average fixed rates fell to their lowest point in early 2026: 3.51% for a one-year fixed bond in March and 3.67% for a two-year fixed cash ISA in February. They have since risen, to 4.35% and 4.53% in September 2026. The average two-year fixed cash ISA rate is now higher than in August 2024. Fixed rates are priced partly on where markets expect the Bank Rate to go, so they can rise even when the Bank Rate hasn't changed. Read more: why fixed savings rates have risen

The gap between easy access and fixed rates has widened. In August 2024, the average one-year fixed bond paid 1.78 percentage points more than the average instant-access account. In September 2026, the gap was 2.29 points.

Inflation has risen. CPI was 2.2% in August 2024. It rose to 3.8% between July and September 2025, eased to 2.6% in June 2026, and was 3.1% in August 2026, with higher energy costs the largest upward contributor.

The Bank Rate over the past few years

After more than a decade of historically low rates, the Bank of England raised the Bank Rate 14 times between December 2021 and August 2023, taking it from 0.1% to a peak of 5.25%. That pushed savings rates to their highest levels in many years. The Bank began cutting in August 2024 and reached 3.75% in December 2025. On 5 November 2026 it raised the rate to 4%, its first increase since August 2023, as the Middle East conflict pushed up energy prices and inflation.

What this means for savers

These are averages across the market. Individual accounts can pay more or less, and some of the highest easy-access rates include a bonus that ends after 6 to 12 months. Rates change often, so check current rates before you open an account. See our savings accounts guide.

Interest above your Personal Savings Allowance is taxed, and the tax rates on savings income rise by 2 percentage points from 6 April 2027. Read more: do savings rates beat inflation? Real returns, tax and account types explained

Read more:

• Savings Accounts Guide

• Bank Accounts Guide

• Average Household Savings & Wealth UK

• Why fixed savings rates have risen