Expert says ‘don’t forget’ as simple mistake can cost saves thousands | Personal Finance | Finance
Britain’s inflation rate has fallen to its lowest level since March 2025 – and economists expect it to dip further by April. With markets pricing in an 86% chance of a base rate cut at the Bank of England’s Monetary Policy Committee meeting on March 19, savers are being urged to move quickly before returns are slashed.
A finance expert has warned that failing to lock in today’s higher savings rates could leave millions of households hundreds – or even thousands – of pounds worse off over time. Antonia Medlicott, managing director of financial education specialists Investing Insiders, says too many savers have already paid the price for inertia.
She said: “Savers should act now to ensure they’re not repeating the same mistake too many UK savers made last year when they lost billions in purchasing power by leaving their money in accounts paying below-inflation interest rates. Too many people forget that if inflation is higher than their interest rate, their money is losing value.
“There are plenty of accounts with good rates to take advantage of. Be prepared to look online for the best rates; the high street is rarely where you’ll find them.
“It’s important to make your money work hard for itself. There are plenty of competitive rates over 4% right now, so don’t settle for less.”
The window could be closing fast
If the Bank cuts rates in March, savings providers are likely to respond swiftly. Ms Medlicott warned: “If the base rate is cut in March, then banks will lower interest rates on savings accounts quickly to protect themselves, which could leave millions of Brits out of pocket long-term by failing to make one smart move with their finances.”
Even a seemingly small drop in rates can have a significant impact over time. For example, a saver with £20,000 earning 4.5% would receive £900 in interest over a year. If that rate fell to 3.5%, the return would drop to £700 – a £200 difference in just 12 months. Over several years, and with larger balances, the gap can run into the thousands.
ISA deadline pressure builds
Savers are also being reminded that they have a £20,000 annual ISA allowance – and only two chances left to use it before expected rule changes.
Ms Medlicott said: “Savers have two £20,000 allowance deadlines left before the rules change. So, if you haven’t already used this year’s full ISA allowance, and cash is the right option for you, it makes sense to save every penny possible into a tax-free environment while you can.”
Interest earned inside an ISA is free from income tax, making it particularly valuable for higher-rate taxpayers.
Cash vs Stocks & Shares
While cash ISAs offer security, Ms Medlicott argues that those willing to accept more risk could see significantly stronger returns in the market.
She said: “ISA providers often offer better fixed-term deals than normal savings accounts, and interest earned is also tax-free. If you want a greater return on your savings, you could consider investing in a Stocks and Shares ISA. This invests your money in the market, which comes with more risk but offers more reward.
From February 2024 to February 2025, the average growth for a Stocks & Shares ISA was 11.86%, compared with 3.8% for a Cash ISA.”
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