We don’t support this browser anymore.
This means our website may not look and work as you would expect. Read more about browsers and how to update them here.

Skip to main content
  • Register
  • Help
  • Contact us

Big banks slow to pass on rate rises – how to get a better savings rate today

Are high street banks taking too long to pass on rate rises? Want to get more interest on your cash? We look at an easy way to get competitive rates.

Important notes

This article isn’t personal advice. If you’re not sure whether an investment is right for you please seek advice. If you choose to invest the value of your investment will rise and fall, so you could get back less than you put in.

This article is more than 6 months old

It was correct at the time of publishing. Our views and any references to tax, investment and pension rules may have changed since then.

The Bank of England has raised its base rate for the 14th consecutive time, but big banks are barely passing on rate rises to savers. And when they are, it’s by tiny amounts.

In fact, big banks have been so slow to raise savings rates that the Chancellor of the Exchequer raised the issue with banks directly in June. And the Financial Conduct Authority recently announced a 14-point action plan to address the issue.

In the last 18 months, the base rate has risen rapidly – jumping to 5.25%.

In contrast, the average instant access rate dragged up to just 2.24%. This looks even smaller when you consider that the average two-year fixed mortgage rate has risen to 6.83%.

This is costing everyday savers billions.

In summer 2023, there was over £900bn of UK savings sat in easy access accounts. Much of it with high street banks paying very low rates.

For the average household, the difference in returns is shocking. Based on a savings pot of £30,000 held for five years, the difference between the average easy access rate and top 10 easy access rates is over £3,510.

That’s a significant amount, especially when we’re still contending with sky-high inflation. This example assumes savings rates doesn’t change for five years and no further deposits or withdrawals are made. Please note easy access rates can change at any time and the interest earned depends on personal circumstances, rates available and the options you choose.

How to get a better savings rate

It’s time to join the savings revolution.

Smaller banks have to work harder to raise money. As a result, they’re quicker to pass on higher rates to savers and compete with each other for your cash.

Active Savings has partnered with a wealth of partner banks and building societies, to help you take back control of your savings. You can access a range of savings products from our banking partners, all through a single online account.

The best easy access rate available through Active Savings is more than double the market average.

Comparisons with average market rates for easy access products are based on instant access products which allow immediate withdrawals. Active Savings offers easy access products and withdrawals usually take one working day.

Picking and switching savings rates is simple and you can do it in a handful of clicks. Please note fixed term products only usually allow you access to your money once it matures.

Discover Active Savings

Source for average market rates: Bank of England, 31 July 2023. Products can be added or withdrawn at any time.

This website is issued by Hargreaves Lansdown Asset Management Limited (company number 1896481), which is authorised and regulated by the Financial Conduct Authority with firm reference 115248.

The Active Savings service is provided by Hargreaves Lansdown Savings Limited (company number 8355960). Hargreaves Lansdown Savings Limited is authorised and regulated by the Financial Conduct Authority (firm reference number 915119). Hargreaves Lansdown Savings Limited is authorised by the Financial Conduct Authority under the Electronic Money Regulations 2011 with firm reference 901007 for the issuing of electronic money.

Hargreaves Lansdown Asset Management Limited and Hargreaves Lansdown Savings Limited are subsidiaries of Hargreaves Lansdown plc (company number 2122142).

Editor's choice: our weekly email

Sign up to receive the week’s top investment stories from Hargreaves Lansdown

Please correct the following errors before you continue:

    Existing client? Please log in to your account to automatically fill in the details below.

    This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

    Loading

    Your postcode ends:

    Not your postcode? Enter your full address.

    Loading

    Hargreaves Lansdown PLC group companies will usually send you further information by post and/or email about our products and services. If you would prefer not to receive this, please do let us know. We will not sell or trade your personal data.

    What did you think of this article?

    Important notes

    This article isn’t personal advice. If you’re not sure whether an investment is right for you please seek advice. If you choose to invest the value of your investment will rise and fall, so you could get back less than you put in.

    Editor's choice – our weekly email

    Sign up to receive the week's top investment stories from Hargreaves Lansdown. Including:

    • Latest comment on economies and markets
    • Expert investment research
    • Financial planning tips
    Sign up

    Related articles

    Category: Funds

    The most popular stocks and shares ISA funds in November 2023

    Discover the most popular funds with HL Stocks and Shares ISA investors in November 2023.

    Jason Roberts

    05 Dec 2023 4 min read

    Category: Funds

    HL Select turns 7 – what we’ve learned and what’s next

    HL Select Fund Manager Steve Clayton looks back on seven years of the HL Select fund range, how it’s performed and what’s next.

    Steve Clayton

    01 Dec 2023 6 min read

    Category: Investing and saving

    Investing in healthcare – where are the opportunities?

    The healthcare sector is enormous, absorbing over 10% of the economic output of many developed nations. We take a closer look at the risks and opportunities to watch out for.

    Derren Nathan

    30 Nov 2023 5 min read

    Category: Investing and saving

    Autumn statement – National Insurance tax change plus ways to help cut your tax bill

    The headline grabbing National Insurance cut might look like good news, but the tax burden is still set to be the highest it’s been since the Second World War. Here’s what’s changed and what you can do to reduce your tax bill.

    Helen Morrissey

    30 Nov 2023 4 min read