UK savers are increasingly looking for long-term flexibility from their savings products, new research by Shawbrook has indicated.
This comes as the interest rate rises by the Bank of England (BoE) have prompted more savers to switch.
Shawbrook’s internal data found that among its cash ISA products, easy-access, one-year fixed, and 18-month fixed accounts were the most popular among savers opening a new account or switching in 2022.
The number of customers saving into a Shawbrook one-year fixed rate cash ISA increased by 59% in 2022, compared to the previous year. The bank’s 18-month fixed rate cash ISA also saw an influx of savers, with new accounts rising by 15% from 2021 to last year.
By comparison, demand for the firm’s three, five and seven-year fixed rate products has slowed. Shawbrook suggested that with savings rates remaining stagnant over recent years, many savers are now looking for the flexibility to be able to switch as increased choice and improved rates come onto the market in line with BoE interest rate increases.
Shawbrook reported the biggest influx of new accounts in October 2022 following the first 0.5 basis point rise from the BoE. Over 10,000 one-year fixed rate accounts were opened that month, equating to more than a 1,400% increase from the previous month.
Head of savings at Shawbrook, Adam Thrower, commented: “There seems to be a slight ‘whack-a-mole’ trend going on with savings, as peoples’ preference for shorter term products has increased in a more competitive market – it’s great to see some energy return after years of rock-bottom rates and inertia.
“With the new ISA year now open, savers should review where their money is sitting right now. At current average rates, savers with over £14,0852 in the top easy-access savings account will exceed their personal savings allowance, so for people with larger savings pots, ISA products could be attractive as they can benefit from tax-free interest payments on annual deposits up to £20,000.”
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