Fading rates set to reshape the savings market in 2026

19th January 2026

Moneyfacts UK Savings Trends Treasury Report savers should be prepared for a new era of returns as savings rates fade from their peaks.

Overall product choice fell by one to 2,318 savings deals (including ISAs) - the third highest on our records. Excluding ISAs, product count fell to 1,661.

The choice of cash ISAs rose by 14 to 657 deals from 643, this is the biggest rise since September and highest since October 2025.

The number of savings providers (excluding cash ISAs) fell to 151, its biggest fall since May 2024. The number of ISA providers has fallen from its record high of 101 to 100.

The average easy access ISA rate fell to 2.69%. The average notice ISA rate fell for a third consecutive month by its biggest margin since September to 3.34%.

The average one-year fixed ISA rate fell to 3.79%, its lowest level since April 2023 (3.68%) and the longer-term fixed ISA rate fell to 3.75%, last as low in March 2023 (3.72%).

The average easy access rate fell for the first time since October to 2.48%, its lowest since July 2023 (2.41%). The average notice rate saw its biggest fall since September to 3.42%, its lowest since June 2023 (3.12%).

The average one-year fixed rate fell to 3.85%, its biggest fall since June and its lowest since April 2023 (3.81%). The longer-term average fixed rate fell for a second month running to 3.80%, its lowest since November 2022 (3.77%).

The Moneyfacts Average Savings Rate has fallen from 3.40% to 3.35% for January, the lowest figure since May 2023 (3.20%). Over the past year the rate has fallen from 3.64% to 3.35%.

Caitlyn Eastell, Personal Finance Analyst at Moneyfacts, said, "A new era in the savings market may be taking shape this year, as savings rates are anticipated to fade from the peaks caused by the market volatility seen over the past three years.

The impact of December's base rate reduction is already making itself known, as all average rates have fallen for the first time in over six months and the number of accounts paying above base rate saw its biggest rise on record to 877, accounting for just under 40% of the market. However, this means that over 60% still don't match base rate, leaving savers' cash languishing and making it harder to build financial security.

"Interest rates are expected to settle around 3.25%-3.50%, the last time they were around this level was December 2022. During this time, the Moneyfacts Average Savings Rate was around 2.80%, whereas at the start of this year it was 3.35%. Similarly, the margin between savings and borrowing is around 0.24% lower than this time last year. Together, this signals that current savings rates may not last and there’s still plenty of headroom for rates to fall. Any fluctuations against the trend are likely to be providers reacting to individual targets.

"The upcoming new tax-year marks the final period for savers under 65 to maximise their £20,000 cash ISA allowance. This may encourage more optimistic savers to wait until ISA season, when competition might typically ramp up.

However, the ‘wait-and-see’ approach could come at a big cost. Across the big banks, they offer just 1.53% on their easy access cash ISAs, which could leave savers around £450 worse off compared to if they stashed their full allowance into an average one-year fixed cash ISA.

The difference becomes more dramatic if they were to switch to the current highest paying accounts. In any case it is crucial that savers review their rates over the coming months to ensure their tax-free allowances are fully utilised."

Source - Moneyfactsgroup.co.uk