- Over half of new HL savings clients opened a cash ISA in July and August (51%). This is up from 20% a year earlier.
- Over 70% of Active Savings clients opened a fixed term savings account.
- Of these savers, 56% opted for a fixed term of less than 12 months. The best rates available in the savings market remain 3- and 6-month fixed rates.
- Only 10% of clients fixed their deposits for longer than 12 months.
- The average easy access rate has dropped by 29bps since the Bank of England cut rates by 25bps. Active Savings is offering the best easy access rate in the savings market.
- UK Savings Week is 9-15 September.
Mark Hicks, head of Active Savings, Hargreaves Lansdown:
“This summer saw the cash ISA season grow an unusually long tail, as constant speculation about tax pushed it up the agenda for so many savers. More recently, we’ve also seen savers flood into shorter-term fixed rates, as the first Bank of England rate cut reminded them of the huge attraction of a fix at a time of falling rates. Both are highly rewarding steps, and there a handful of additional steps that people can consider this UK Savings Week.
This is a bumper cash ISA season, running longer into the tax year than normal. The percentage of new HL savings clients choosing a cash ISA is up significantly on the same period a year earlier, and it’s now the first choice of more than half of our new savers. It’s the natural consequence of a combination of speculation about potential tax hikes and relatively high savings rates. Already, anyone with a decent chunk of savings will be concerned about a potential tax bill, so the fear of that bill rising any further makes a cash ISA an even more attractive option.
Savers are keen to lock in rates as interest rates continue to fall. The switch into fixed rate savings was already underway in July but was further fuelled by the first Bank of England rate cut in August, reminding savers of the real benefit of fixing. At the moment, the best rates are on short-term fixes for less than a year, and this is where we’re seeing clients congregate. More than half of them have taken the opportunity to capitalise on the certainty of a fix, without tying their savings up for a significant period.
What should you do now?
UK Savings Week is a good time to take a closer look at your savings, and there are five sensible moves for any saver.
- Take stock of your savings. You need to know how much you have, where it is, and what interest you’re earning on it.
- Work out what your savings are for. Don’t think of it as one big lump sum, break it down according to when you need the money.
- Prioritise emergency savings. When you’re working age, you need cash to cover 3-6 months’ worth of essential spending, and when you have retired you should be able to cover 1-3 years’ worth. This needs to be in an easy access savings account so you can get your hands on it quickly.
- Lock up each chunk of additional cash for the period that makes most sense. So, for example, any cash you need in 1-2 years’ time can be fixed for a year. And any cash you need in 2-3 years’ time can be fixed for two years. If you don’t have specific dates when you need the money, you could opt for a range of fixes, so some cash is available each year to be spent or tied up again for longer.
- Shop around for a better interest rate. Don’t just stick with the miserable rates on offer from the high street giants, consider smaller banks and online savings platforms, which tend to offer better rates. If you want a range of accounts and are worried about losing track, a savings platform will let you see everything in one place and easily switch between accounts from different banks.”
About HL’s cashback offer
- New clients to the Active Savings can earn up to £150 cashback.
- Cashback payable to anyone that opens an Active Savings account before 26 September 2024, with £5,000 or more.
- With this cashback offer, new clients can earn up to 5.26% AER on fixed rate products, the highest in the market
- The cashback gives Active Savings the top rate in the market across multiple products.
- The cashback means HL has three top of market rates, assuming clients deposit £10,000.
- Clients will receive a cash payment into their Active Savings account based on the opening value of assets opened in the cashback window.
Cash offer amounts
| Value deposited into savings products | Cashback amount |
| £5,000 – £9,999 | £10 |
| £10,000 – £19,999 | £20 |
| £20,000 – £29,999 | £40 |
| £30,000 – £49,999 | £60 |
| £50,000 – £74,999 | £100 |
| £75,000 + | £150 |
Market leading rates with HL cashback (highlighted in yellow)
| Deposit amount of £10,000 | Highest rate without cashback (AER) | Highest rate with cashback (AER) |
| Easy Access | 4.84% | 5.04% |
| 3-month FTD | 4.98% | 5.18% |
| 6-month FTD | 5.00% | 5.20% |
| 1-year FTD | 4.70% | 4.90% |
| 2-year FTD | 4.60% | 4.90% |
