Savers have been urged to take advantage of current high interest rates before the base rate starts to drop.
Karen Barrett, CEO and founder of Unbiased.co.uk, said people should “take avantage” of the current rates on easy access, ISAs and fixed rate savings accounts.
She told Express.co.uk: “If you’re happy to lock your money away for a while, a fixed-rate account could be a good way to take advantage of high savings rates for as long as possible.
“And as the Bank of England’s persistent base rate rises since December 2021 have driven annuity rates higher, now’s the time to consider an annuity for a fixed income during retirement.
“If you want to get the most out of your money, you can find a financial adviser via Unbiased, who can help by looking at your circumstances and future goals and recommending the best course of action.”
Ms Barrett said it was a “tricky one to call” whether the central bank should have cut the base rate in its decision this week, with the base rate held again at 5.25 percent.
She explained: “While inflation has recently fallen more than expected and UK wage growth has slowed, there has been some disconnect between expert forecasts and reality.
“For example, there was a surprise rise in inflation to 4 percent in December. A key factor in the Bank of England cutting rates is confidence that inflation is under control.”
Ms Barrett said the UK could see rate cuts from as early as May with the potential for two or three reductions this year.
However, she also commented: “It’s vital to recognise this may change. For example, if inflation rises, these optimistic forecasts could change, and a base rate reduction could be pushed back.”
Neil Rayner, head of advice at True Potential, also said the base rate could soon fall. He said: “Inflation falling to 3.4 percent is a good sign that the UK is on track to cut interest rates in the near future, with the first cuts expected around June.
“This will offer major relief to homeowners and those with debts tied to interest rates who will find that they have more of their monthly income leftover.”
Mr Rayner spoke about some of the savings options people should look at. He said: “With interest rates currently at 5.25 percent, some easy access savings accounts and cash ISAs have proven popular. However, with rates set to fall, so too will these returns on your savings account.
“To consistently beat inflation savers should consider a Stocks and Shares ISA which have historically exceeded inflation and any returns are completely tax-free.”
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