Savers are increasingly switching cash from instant access and notice accounts to fixed rate accounts in the expectation of more Bank of England (BoE) base rate cuts, Investec Save has found.

The BoE’s Monetary Policy Committee (MPC) has cut the base rate three times since a peak of 5.25% in August last year to 4.5%, which it kept at this rate in the latest announcement yesterday.

Investec Save’s research showed that 37% of people have moved money into fixed rate accounts in the past three months, with 31% of them moving more than £10,000 out of instant access and notice accounts. A further 16% have moved between £5,000 and £10,000.

The group also found that 54% of those who have switched have chosen one-year fixed rate accounts, while 29% have opted for tow-year fixed rate accounts. Around 7% have picked three-year fixed rate accounts.

The firm stated that the switch to fixed rate accounts is likely to continue to gather momentum, with 36% stating that they intend to move money out of instant access and notice accounts over the next six months, with 35% undecided about whether to move any money.

Over a quarter (27%) of those confidently planning to switch say they will move £10,000 or more, while 20% will move between £5,000 and £10,000.

Of the available accounts, the most popular choice was a one-year fix, with 47% of those questioned choosing this option, while 29% and 10% opted for two and three-year fixes, respectively.

Head of retail savings at Investec Save, David Hunt, said: "Savers are opting to lock in higher rates with fixed rate accounts and clearly seem to believe there will be more BoE base rate cuts throughout the year.

"It is the sensible choice as long as savers do not need access to their cash for a year or more, but it can be an issue if people change their minds. That is why it is advisable - where possible - to have a range of accounts for different needs, including instant access and notice accounts which pay a higher rate than instant access but enable savers to access their money more quickly than when it’s saved in fixed rate accounts."

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