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Savers Urged to Act as Banks Cut Interest Rates Following Base Rate Reduction

Martin Lewis and financial experts recommend locking in fixed-rate accounts and diversifying savings as rates drop after the Bank of England's base rate cut to 4.25%.

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Overview

  • The Bank of England reduced its base rate from 4.5% to 4.25% on May 8, prompting major banks like Lloyds and Barclays to lower savings rates.
  • Martin Lewis has advised savers to secure fixed-rate accounts immediately to lock in current rates before further reductions occur.
  • Easy-access savings rates are expected to decline further, while fixed-rate accounts offer stability by locking in returns for set terms.
  • Experts recommend diversifying savings into ISAs, money market funds, and low-volatility investments to balance risk and maximize returns.
  • Top fixed-rate savings accounts currently offer returns of approximately 4.4% to 4.6%, but these rates may drop as providers adjust to market changes.