Savvy savers prepared to shop around can easily beat inflation during 2026

The most competitive fixed-rate savings accounts are likely to remain stable and pay more than 4 per cent per annum, as future cuts in interest rates are already priced in.

But there will be some pressure on easy access and variable savings rates in the first half of 2026, with savings experts at investment platform Hargreaves Lansdown expecting them to fall towards 3.5 per cent by the end of the year.

The UK bank base rate stands at 3.75 per cent after a quarter point cut by the Bank of England shortly before Christmas. At least one further cut is forecast during the course of this year. The official rate of annual consumer price inflation stood at 3.2 per cent in November - the latest month for which a figure is available.

For the first time in years, a “meaningful gap” will open between easy access and fixed-rate accounts, according to Hargreaves Lansdown.

Mark Hicks, the firm’s director of savings, said: “Sluggish savers are going to work harder to stay ahead of inflation in 2026, while savvy savers will need to switch strategy - from chasing the top rates to identifying the best types of accounts for their needs.

“The Bank of England is expected to continue a gradual cutting cycle, and HL forecasts two cuts in 2026 - to reach 3.25 per cent by the end of the year. Savers should still be able to get decent returns, even after inflation, but they will need to work harder.”

He added: “The big five banks already pay 1 per cent on their regular savings accounts, so it’s worth considering taking money out of low‑paying savings accounts with the high street giants and checking the rates available with online banks and savings platforms, which tend to offer much better deals. Moving from a miserable account at the big five banks to the top paying accounts in 2026 could make you over 3 percentage points more.

“Any cash that is unlikely to be needed during 2026 could be locked into competitive fixed term cash ISAs or savings accounts - or a combination of both - to make the most of both tax efficiency and the most competitive rates.”

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