UK households who have savings account warned 'it would be wise to act with haste'

People with a savings account have been warned to "act with haste" as savings rates drop across the country. In the wake of the Labour Party Budget and Bank of England base rate cut, The Bank of England has started slashing interest rates in a blow to savers.

Data from Moneyfactscompare shows the top one-year fixed bonds have dropped to 4.85 per cent. The difference between one-year and five-year fixed bonds now stands at just 0.21 per cent, down from 0.31 per cent a month ago.

Caitlyn Eastell, a spokesperson at Moneyfactscompare.co.uk, said in a warning to savers: "Despite a short but welcome return during October, fixed rate bonds paying 5 per cent or above have yet again disappeared from the market."

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"With the Bank of England moving to reduce base rate, it is possible that this decision will impact providers pricing strategies, so it is unlikely that we will see them make a comeback," she added, after the Bank of England move last week.

"Consumers would be wise to act with haste if they spot an attractive deal, as they may have a shorter shelf-life," she warned. "To avoid cuts further eroding deposits, it would be wise for savers to lock into a competitive rate," advised Eastell.

She suggested that longer-term investments might be worth considering. She explained in a warning to savers: "It may be worthwhile considering securing their cash for longer to reap the most benefits of higher-paying rates."

Whilst the rate on a five-year option has not changed in the last month, the one-year rate has fallen, according to Moneyfactscompare. As has the two-year version. Savers should expect these rates to continue moving downward. Therefore, anyone looking for a fixed rate account should act fast and consider challenger brands which tend to offer the best returns.