Savers face worst choice of products for 14 years after rates tumble

Savers are facing the worst choice of products in at least 14 years, both in terms of the number of deals available and the average rates on offer, according to analysis.

Financial information website Moneyfacts.co.uk counted 1,340 savings deals, including cash Isas, on the market, which is 248 fewer than a year ago and a record low since its electronic records started in 2007.

The number of savings deals on the market has been shrinking for six months in a row.

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Meanwhile, some average savings rates, which had already been sitting at record lows, became even worse in April.

Saving rates are extremely low

The average easy-access cash Isa rate fell from 0.23% in March to 0.22% in April. A year ago, easy-access Isa savers could typically get 0.79%.

Typical easy-access savings rates generally remained at 0.16%, which was unchanged from the previous month. In April 2020, the average rate was 0.51%.

The average one-year fixed-rate cash Isa now pays just 0.36%, down from 0.38% in March and 1.04% in April 2020.

The number of savings deals paying above the Bank of England base rate of 0.10% fell for the sixth consecutive month to 1,044 in April.

It was the lowest number of deals to beat the base rate since February 2009, Moneyfacts said.

Rachel Springall, a finance expert at Moneyfacts, said: “While the average easy-access rate stands at 0.16%, the lowest rate in this sector is 0.01%, so there is still reason to switch.”

She added: “As the UK eases out of lockdown, it will be interesting to see whether savers start to spend some of their accumulated disposable income, or if they will stay grounded and save their cash.

“If searching for the best deals, challenger banks continue to offer some of the top rates; however, the top rate tables remain volatile.”