This Thursday, the Bank of England is expected to cut interest rates to four per cent, which could be further reduced to a base rate of 3.5% by the end of 2025. This has led a finance expert to warn savers who don’t act quickly that they could be locked out of the competitive rates currently offered by savings accounts for months or even years.

Antonia Medlicott, Managing Director of financial education specialists Investing Insiders, has revealed that not acting now could cost you more than £300 within the next year.

She said: ‘’Savers risk missing out on hundreds a year in interest if they delay. We’re at a tipping point where savings accounts still offer rates above 5.5%, but those deals are likely to vanish fast.”

She added: ‘’In fact, recent analysis by Moneyfacts has revealed that switching £10,000 into an account with a top interest rate now, could earn the saver more than £300 extra a year compared to the average rate within an ISA, which currently stands at just 2.7%.’’

The Bank of England will cut interest rates to 4%.

placeholder image — The Bank of England will cut interest rates to 4%.

She continued: ‘’Savers currently earning under 4.5% are urged to switch now to prevent leaving money on the table, with economists currently predicting further cuts in November, possibly reaching as low as 3.5% by the end of this year.’’

Whilst all savers should hunt around for the best deals, Antonia warns that delaying this could result in missing out, and revealed the best accounts to use right now.

Antonia said: “Banks are quick to adjust interest rates on savings accounts downwards, usually much faster than they increase. Most people are unaware of how quickly savings rates change.”

She added: ‘’The public should act quickly. The top interest rate outside of a Cash ISA is currently 6% at Santander; however, this is a bonus rate with restrictions that savers should make themselves aware of.’’

She continued: ‘’Within a Cash ISA, the top rate is currently 5.44% with CMC Invest, which is still excellent, and the advantage with this account is that any gains are sheltered from tax. ISA uptake and switching rates are lowest in parts of the North West, Wales, and East Midlands, leaving Brits in these areas particularly vulnerable to falling rates this week.’’

Finally, Antonia explains the importance of using an ISA allowance to help people pay less on their savings.

She added: ‘’Remember to utilise ISA allowances as cuts to Capital Gains Tax allowance will mean more and more people are pulled into paying tax. This is especially true for higher-rate taxpayers who are urged to prioritise ISAs over standard savings accounts due to the reduced rate on the personal allowance.’’

For more information, look here: https://investinginsiders.co.uk/isa/best-stocks-shares-isa