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Banks (Finance)

High-Street Banks to Slash Interest Rates on Savings Accounts in Coming Weeks

Strategic Insights

— 2 min read

As a result of the Bank of England's announcement on May 8 to cut the base rate from 4.5 per cent to 4.25 per cent, most high-street banks have warned that interest rates on some savings accounts will be reduced in the coming weeks. While the move may be a welcome relief to households with a tracker mortgage, it's bad news for Brits who have been saving for a rainy day. The decision will impact a variety of savings accounts, with some seeing interest rates decrease as much as 0.20-0.5%.

Key Takeaways:

  • HSBC will be reducing interest rates on several savings accounts, including the Easy Access account, with balances up to £50,000 falling from 1.50% to 1.35%, and balances between £50,000 and £100,000 decreasing from 1.60% to 1.45%.
  • Lloyds will be reducing interest rates on Easy Saver/Cash ISA accounts, with balances between £1 and £25,000 decreasing from 1.10% to 1.05%, and customers with more than £100,000 being hit with a 0.20 decrease, dropping from 1.40% to 1.20%.
  • Halifax will follow the same interest rate decrease as Lloyds' Easy Save and Cash ISA accounts, with the Everyday Saver and ISA Saver variable accounts being impacted.
  • NatWest will pass on the rate cut in full to its customers on a Standard Variable Rate (SVR) mortgage, reducing it from 7.49% to 7.24%, effective from 1st June.
  • Santander will be reducing interest rates for savings products linked to the BoE base rate, starting from June 3, 2025, impacting Rate for Life and Good for Life savings accounts.
  • Brits still have time to shop around, as the interest rate cuts don't kick in until later this month, or in June.
  • The interest rate reductions will impact a range of savings accounts, including easy access accounts, cash ISA accounts, and variable rate savings accounts.

Statistics:

  • The Bank of England's base rate has been cut from 4.5% to 4.25% (Source: Bank of England).
  • The reduction in interest rates on several HSBC savings accounts will result in up to 0.20-0.5% decrease in interest rates (Source: HSBC).
  • Lloyds customers with balances between £1 and £25,000 will see an interest rate decrease of 0.05% (Source: Lloyds).
  • Halifax's Everyday Saver and ISA Saver variable accounts will follow the same interest rate decrease as Lloyds' Easy Save and Cash ISA accounts (Source: Halifax).
  • NatWest's SVR mortgage will be reduced from 7.49% to 7.24%, effective from 1st June (Source: NatWest).
  • Santander will be reducing interest rates for savings products linked to the BoE base rate, starting from June 3, 2025 (Source: Santander).

Sources:

  • Bank of England: Cut in base rate (Source: Bank of England, May 8)
  • HSBC: Interest rate reductions on several savings accounts (Source: HSBC)
  • Lloyds: Interest rate reductions on Easy Saver/Cash ISA accounts (Source: Lloyds)
  • Halifax: Interest rate reductions on Everyday Saver and ISA Saver variable accounts (Source: Halifax)
  • NatWest: Reduction in SVR mortgage (Source: NatWest)
  • Santander: Reduction in interest rates for savings products linked to the BoE base rate (Source: Santander)

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