Savers seeking competitive returns have received welcome news as Skipton Building Society launched its new Bonus Saver account offering 4.50 cent interest.
Skipton’s new account arrives at a crucial time for savers looking to maximise returns whilst rates remain elevated.
The Bank of England’s Monetary Policy Committee voted 6-3 to maintain the current bank rate at 4.25 per cent.
Alice Haine, Personal Finance Analyst at Bestinvest by Evelyn Partners, said the decision “will be more of a boon for savers, as it means savings rates may remain higher for longer.”
Skipton’s new Bonus Saver is available to new and existing customers. It offers a “competitive” interest rate of 4.50 per cent, which includes a 1.70 per cent fixed bonus for the first 12 months.
The building society’s move follows its recent launch of a Cash ISA Base Rate Tracker offering 4.10 per cent, providing savers with multiple options to benefit from the current rate environment.
Skipton’s new Bonus Saver is available to new and existing customers
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The Bonus Saver allows deposits from £1 up to £50,000 and provides easy access with no withdrawal penalties. Customers can open the account online, via the app, in branch or by telephone.
Interest is paid annually on both the Bonus Saver and the Cash ISA Base Rate Tracker, which tracks 0.15 per cent below the Bank of England Base Rate for 12 months.
Alex Sitaras, Head of Savings & Partnership Products at Skipton Building Society, said: “We are happy to announce the launch of our new Bonus Saver, offering a competitive 4.50 per cent rate.
“Alongside our recently launched Cash ISA Base Rate Tracker, we’re continuing to expand our range of accessible, good value savings options to help more people, whether they’re new to Skipton or long-standing members.”
Both accounts offer flexibility for savers who may need access to their funds whilst still earning competitive returns.
With more than 1,400 savings accounts currently beating inflation at 3.4%, savers have numerous options, but this window of opportunity is narrowing.
Haine warned that “savings rates have been in retreat mode in recent months” and urged savers to act quickly: “With more bank rate reductions expected this year, those that want to preserve their return must act fast by securing the best deal possible while interest rates remain on the higher side.”
She emphasised the urgency for anyone with funds “idling in a current account or an old savings account offering a poor return, which is being slowly eroded by inflation.”
The analyst cautioned that when considering post-tax returns, savers may discover their cash is being eroded faster than anticipated, particularly as more taxpayers find themselves in higher tax bands due to frozen personal tax thresholds.
Britons are looking to boost their savings
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The Personal Savings Allowance poses a particular challenge for higher earners, with basic rate taxpayers able to receive up to £1,000 of interest tax-free, whilst higher rate taxpayers are limited to £500.
Additional rate taxpayers receive no allowance at all, and Haine noted that “higher-rate taxpayers are particularly at risk of breaching the PSA, especially if they’ve secured one of the market’s top-paying accounts.”
To avoid unexpected tax bills, she recommended “making full use of the £20,000 ISA allowance and boosting pension contributions can help shelter returns from the taxman, while also supporting long-term wealth goals.”
With the Government currently reviewing ISA rules, including potential caps on Cash ISA contributions or changes to Stocks & Shares ISA terms, Haine advised those wanting to secure current benefits to act before any changes are announced.