Share of savings accounts beating inflation falls to 49%

Which? analysis published on 22 September 2025 found that the proportion of savings accounts offering rates that beat inflation has fallen from 80% in January 2025 to 49%¹. The consumer body said the finding means cash held in the remaining accounts is effectively losing value over time¹. The analysis was published on the first day of UK Savings Week, an annual event started by the Building Societies Association that runs from 22 to 28 September 2025¹.

The comparison uses the current inflation figure of 3.8%¹. Which? said the closer a savings rate is to the rate of inflation, the less value cash loses over time¹. Its table of top accounts, with rates sourced from Moneyfacts on 22 September 2025, listed an instant-access account at 5% AER on balances up to £3,000, and fixed-rate accounts ranging from 4.43% over two years to 4.53% over five years¹. On the Cahoot account paying 5%, Which? noted that interest is only paid on balances up to £3,000, and anything above that earns nothing¹.

Separately, a Skipton Building Society survey cited by Which? found that 39% of savers rarely or never move their funds, with 21% of those respondents believing it is too complicated¹.

Which? also set out features that affect the return actually received. On boosted deals, it said Chase's Saver with Boosted Rate offers 4.75% AER including a bonus rate of 2.25% fixed for 12 months, after which only the standard rate applies, currently 2.5% AER¹. On regular savers, it said these typically accept between £250 and £500 a month and pay higher rates, citing Zopa's one-year account at 7.1% AER, but that saving £300 a month for 12 months at that rate would earn closer to £137 rather than the roughly £256 the headline rate might suggest, because each deposit only earns interest for part of the year¹.

On tax, Which? said the personal savings allowance lets basic-rate taxpayers earn up to £1,000 a year in savings interest tax-free, higher-rate taxpayers get a £500 limit, and additional-rate taxpayers have no personal savings allowance¹. It said Isas allow up to £20,000 to be saved tax-free each year, with adults able to choose four types: the cash Isa, stocks and shares Isa, innovative finance Isa and lifetime Isa¹.

Why it matters for households

The fall from 80% to 49% means that, on Which?'s measure, around half of savings accounts now pay less than the 3.8% rate of inflation, so money held in them buys less over time¹. The effect depends on the account and the balance: the 5% instant-access rate cited applies only to balances up to £3,000, with nothing earned above that¹. For regular savers, the gap between the advertised rate and the interest actually received widens because deposits build up through the year¹.

Tax treatment varies by band. Basic-rate taxpayers can receive up to £1,000 of savings interest tax-free a year, higher-rate taxpayers £500, and additional-rate taxpayers have no allowance, so interest above those limits is taxable¹. Isas, which allow up to £20,000 a year to be saved tax-free across four product types, sit outside that allowance¹. The Skipton survey finding that 39% of savers rarely or never move their funds indicates that many accounts are held on rates that may no longer reflect the market¹.

What happens next

UK Savings Week runs from 22 to 28 September 2025¹. The inflation figure used in the comparison, 3.8%, is the current rate at the time of publication; the next inflation data has not been reported here¹.