What does a Base Rate hold mean for me?

With the Monetary Policy Committee (MPC) deciding not to increase the Bank of England Base Rate again – what does this means for savers thinking about what to do with their money?

We asked Alex Sitaras, Head of Savings and Partnerships at Skipton, for his thoughts.

What does the hold on the Base Rate mean?

With the recent drop in inflation rates, and the expectation that this will decrease further over time, the signs suggest that savings rates might have reached their peak. The MPC continues to hold the Bank Base Rate, with many expecting decreases in Base Rate later this year. Some savings providers have already started cutting savings rates.

According to Skipton’s analysis of CACI savings data from September 2023¹, more than £48 billion is expected to mature from fixed rate products across the market in the first quarter of 2024. If you have a savings account reaching the end of its fixed term, now might be a good time to look at what you could be doing with your savings to make them work hard for you.

What are my options?

During this period of interest rate uncertainty, there could be ways people can make their money “work harder” and the first really important thing is to take control of your money.

For those savers who can afford to put some of their cash away for a fixed term – products like Fixed Rate Bonds could give savers the opportunity to lock into rates now and receive the same interest rate for the next few years, provided they are comfortable in locking their money away for that length of time.

However, if you'd like the reassurance of some access to your money if you need it, a variable rate product like Easy Access Accounts could be a good option for you.

¹Source: CACI’s CSDB, Stock, September 2023