Moneyfacts UK Savings Trends Treasury Report data, yet to be published, highlights that the average long-term fixed bond rate has increased by 0.05% to 1.30%, the first time Moneyfacts has seen a significant rate rise of 0.05% or more since October 2015.

Charlotte Nelson, Finance Expert at Moneyfacts, said:

“The increase to the average long-term fixed rate represents a small but fundamental shift in the market. After reaching record lows last year, savings rates in the long-term fixed bond market are at last seeing a boost again. The 0.05% increase may appear small, but savers who have been waiting since October 2015 for a significant upturn in rates will be glad to see a seedling of hope.

“The increased presence of challenger banks has been driving the boost in the average rate, with rate increases and launches outweighing cuts for the first time in 15 months. These banks are still relative newcomers and so with no brand name as such to trade off the best way to get savers’ attention is to offer the best rates. These banks need to continue to remain competitive, as when a tranche of bonds matures, they do not want a substantial majority of their savings book to go elsewhere. Keeping rates among the Best Buys will ensure that at least some existing customers will opt for another bond with them.

“With many savers waiting for the NS&I three-year fixed bond, expected to be announced in the spring, many of these providers know that they will likely be unable to compete with the predicted rate of 2.20%. Instead, they are choosing to attract customers now to preempt this.

“With these newer brands competing against one another for the top of the Best Buy charts, the savings market is starting to see a micro-market forming, especially as the larger main banks are still reluctant to compete at all. The term funding scheme is likely to only exasperate this further.

“Whilst this is positive news, savers are still battling rising inflation, so they will have to remain vigilant to get the best possible return on their savings.”

The Moneyfacts UK Savings Trends Treasury Report, out later this month, is a comprehensive monthly overview of current and historical data for the savings and investment market, incorporating written commentary alongside graphs and tables highlighting key trends.

www.moneyfacts.co.uk - The Money Search Engine

Moneyfacts.co.uk is the UK's leading independent provider of personal finance information. For the last 20 years, Moneyfacts' information has been the key driver behind many personal finance decisions, from the Treasury to the high street.

Only logged in users are allowed to post comments. Register/ Log in

The Market Oracle is a FREE Financial Markets Forecasting & Analysis web-site.
(c) 2005-2024 MarketOracle.co.uk (Market Oracle Ltd) - Market Oracle Ltd asserts copyright on all articles authored by our editorial team and all comments posted. Any and all information provided within the web-site, is for general information purposes only and Market Oracle Ltd do not warrant the accuracy, timeliness or suitability of any information provided on this site. nor is or shall be deemed to constitute, financial or any other advice or recommendation by us. and are also not meant to be investment advice or solicitation or recommendation to establish market positions. We do not give investment advice and our comments are an expression of opinion only and should not be construed in any manner whatsoever as recommendations to enter into a market position either stock, option, futures contract, bonds, commodity or any other financial instrument at any time. We recommend that independent professional advice is obtained before you make any investment or trading decisions. By using this site you agree to this sites Terms of Use. From time to time we promote or endorse certain products / services that we believe are worthy of your time and attention. In return for that endorsement and only in the cases where you purchase directly though us may we be compensated by the producers of those products.