Cash savers can once again grow the real value of their money after inflation fell to 2.6 per cent, with new analysis showing there are now nearly 2,000 savings accounts paying rates above the current Consumer Prices Index (CPI). The latest inflation figures from the Office for National Statistics (ONS) show CPI eased to 2.6 per cent in June, down from 2.8 per cent in May.
Average Savings Account Pays 3.59%
According to analysis by Moneyfactscompare.co.uk, the average new savings account is now paying 3.59%, meaning savers are earning returns that are 0.99 percentage points above inflation. It marks the strongest real returns for cash savings since March 2025, giving households a better chance of preserving - and potentially increasing - the purchasing power of their money.
Moneyfactscompare.co.uk said there are currently 1,960 savings accounts paying more than the rate of inflation. That is up from 1,825 accounts in June. The figure includes 284 easy access accounts, 197 notice accounts, 204 variable-rate ISAs, 412 fixed-rate ISAs and 863 fixed-rate bonds.
Top-Paying Deals Offer Significant Gains
The difference between choosing an average savings account and one of the market's top-paying deals can also be significant. Someone with £10,000 in a market-leading easy access account paying 5 per cent AER would earn £500 in interest over a year, equivalent to a real gain of around £240 once inflation is taken into account. By comparison, the average new savings account paying 3.59 per cent would generate £359 in interest, while an account paying just 2 per cent would leave the saver worse off in real terms because inflation would outpace the return.
Expert Comments on Inflation and Savings
Adam French, Head of Consumer Finance at Moneyfactscompare.co.uk, said: "While the cost of living continues to weigh on household budgets, the latest inflation figures provide some small relief, especially for savers. The average savings account has moved from paying 0.34 percentage points below inflation last September to 0.99 percentage points above inflation today. For many savers, what matters most isn't whether savings rates rise or fall in isolation, but whether they stay ahead of inflation, and as things stand, they are doing just that and allowing many households to preserve or grow their purchasing power."
He said there were now "plenty of opportunities" for savers to shop around, adding that the difference between an average account and one of the best-paying deals could amount to more than £140 on a £10,000 balance over a year. However, Mr French warned inflation could begin to edge higher again over the coming months as households face higher energy costs and wider economic uncertainty. He said this could reduce the real value of savings unless providers continue offering competitive rates.
For that reason, he said some of the best-paying easy access accounts may become increasingly attractive because they allow savers to withdraw money if needed while still benefiting from competitive returns. With inflation and savings rates continuing to shift, experts say regularly reviewing where cash is held could make a noticeable difference, particularly for households with larger balances sitting in low-paying current or savings accounts.
