Why your easy access rate lags Bank Rate
When Bank Rate rises, most big banks pass on only part of it to easy access savers. Here's what the FCA found, and what it means for your savings.
Oli Butcher, CEO, Riff
Published 18 October 2026 · Last reviewed 18 October 2026 · 3 min read
Short answer
When Bank Rate goes up, the biggest banks pass on only a fraction of the rise to easy access savers. The FCA found the nine largest passed on 28% of a 4.25 point rise between January 2022 and May 2023, against 89% for mortgage customers on standard variable rates.
What is Bank Rate, and why doesn't my savings rate follow it?
Bank Rate is the rate the Bank of England pays on money banks hold with it. It sets the floor for what money costs across the economy. It stood at 3.75% after the Bank’s last decision on 17 September 2026.
Your savings rate isn’t tied to it. Each bank sets its own rate, and it moves that rate when it chooses. Mortgage rates tend to follow Bank Rate up quickly. Easy access savings rates tend to follow it slowly, and only part of the way.
How much did the banks pass on?
The FCA looked at the nine largest savings providers in its 2023 Cash Savings Market Review. Between January 2022 and May 2023, Bank Rate rose by 4.25 percentage points. On average, those nine banks passed 28% of that rise on to easy access savers.
- Easy access savings: 28% passed on, with a range of 15% to 61% across the nine.
- Notice and fixed-term savings: 51% passed on.
- Standard variable rate mortgages: 89% passed on.
So a saver with the average big bank got less than a third of the rise. A borrower on the same bank’s standard variable rate got almost all of it.
Where is the money sitting?
At the end of June 2023, about £260bn of easy access savings sat in accounts paying 1% or less. That was around 40% of the easy access balances the FCA looked at. The FCA has since reported a significant fall in money held in accounts paying under 1%, so the figure today is lower.
The gap hasn’t closed, though. In August 2026, the average rate on households’ instant access and current account balances was 1.65%, according to the Bank of England. The average rate on new fixed-term deposits was 4.24%.
Why does this happen?
A bank prices its easy access account for the customers who stay. Most people don’t check their savings rate often, and fewer still move their money when a better rate appears elsewhere. If customers don’t move, the bank has little reason to pay more.
None of this is a scandal. It’s their job. A bank’s duty is to its shareholders as well as its customers, and pricing for inertia is how the deposit business has always worked. The FCA’s Consumer Duty now asks banks to show their savings rates give fair value, which has pushed some rates up.
What can I do about it?
- Check what you’re earning. Your banking app or annual statement shows the rate on each account. Compare it with Bank Rate.
- Look beyond your own bank. Smaller banks and building societies have tended to pay more than the largest providers.
- Keep an eye on your rate after you move. Rates on easy access accounts can change at any time, and introductory bonuses end.
- Stay within the FSCS limit. Eligible deposits are protected up to £120,000 per person, per authorised bank. See our guide to FSCS protection.
Sources
- FCA Cash Savings Market Review 2023
- FCA update on cash savings, September 2024
- Bank of England effective interest rates, August 2026
- Bank of England, September 2026 Monetary Policy Summary
This guide is general information, not financial advice. Rates and rules change, so check the latest position before you act.