Nationwide cut interest rates across its range of variable-rate savings products, including instant-access and Isa accounts, by up to 0.25 percentage points from 10 February 20261. The change was reported alongside a separate reduction by National Savings & Investments (NS&I), which cut the rates on its Direct Saver and Income Bonds products from 3.3% AER to 3.05% from 12 February 20261.
The Nationwide reduction came as average rates across the market fell. Moneyfacts data showed the average instant-access rate dropped from 2.48% AER to 2.41% in the month to 1 February 2026, while the average one-year rate fell from 3.85% to 3.81% month on month and the average rate for a bond lasting more than 12 months slipped from 3.8% to 3.79%1. The Bank of England base rate has fallen six times since August 2024, dropping to 3.75% in December 2025, and was held at that level1.
For NS&I's Income Bonds, interest is paid monthly into a nominated bank account rather than added to the savings pot, so the lower gross rate, which also dipped from 3.26% to 3.01%, is described as a more accurate measure of overall returns1.
Fixed-rate deals available on 11 February 2026, as sourced from Moneyfacts, included:
| Account type | Provider | Interest rate (AER) | Minimum investment |
|---|---|---|---|
| One-year fixed rate | DF Capital | 4.25% | £1,000 |
| Two-year fixed rate | Sensible Savings | 4.2% | £5,000 |
| Three-year fixed rate | Sensible Savings | 4.2% | £5,000 |
| Four-year fixed rate | Cynergy Bank | 4.25% | £1,000 |
| Five-year fixed rate | Tandem Bank | 4.33% | £1 |
Why it matters for households
The cuts reduce the interest paid on variable-rate accounts, which providers can adjust whenever they choose, and instant-access accounts are usually the first to be affected1. Savers holding Nationwide variable-rate products, including easy access savings accounts and cash Isas, saw the change take effect from 10 February 2026, while NS&I Direct Saver and Income Bonds customers saw their rates change from 12 February 20261.
Tax treatment also affects what savers keep. Basic-rate taxpayers can currently earn up to £1,000 in interest tax-free a year, higher-rate taxpayers £500, and additional-rate taxpayers get no allowance1. Up to £20,000 a year can currently be held in an Isa tax-free, split between multiple cash accounts or other Isa products1. From April 2027, new rules mean the amount that can be held in cash within an Isa will fall to £12,000 for savers under 65, with the remaining £8,000 needing to be invested in a stocks and shares Isa to use the full £20,000 allowance1.
The Financial Services Compensation Scheme (FSCS) protects up to £120,000 held in each UK-authorised provider if the firm goes bust, and the limit applies per banking group rather than per brand1. The report was updated to correct an earlier claim that FSCS protection for Lloyds Bank is shared with other providers in the banking group; Lloyds Bank has its own banking licence and customers are protected up to the full £120,000 limit1.
What happens next
Experts predict the base rate will be cut again in the month following the report, according to the article1. The change to the cash Isa allowance takes effect from April 20271.
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