Data from the latest Moneyfacts UK Savings Trends Treasury Report, due to be published tomorrow, shows that the number of savings products has increased to 1,700, marking the highest level of availability seen since January 2016.
The table below highlights the improvement, most of which has been seen in the last eight months. This is good news for savers, who now have more accounts to choose from than they've had in 18 months – and in even better news, savings rates are showing signs of life, too. Just last week we found that the average one-year bond rate had hit an 11-month high, and with speculation of a base rate rise on the cards, it's hoped that things could improve even more in the months ahead.
|Total number of live products||1,719||1,627||1,438||1,495||1,700|
|Source: Moneyfacts Treasury Report|
"Positivity seems to be returning to the savings market, with the total number of live products increasing by 262 from its all-time low in November 2016, having reached 1,700 for the first time in a year and a half," said Charlotte Nelson, finance expert at Moneyfacts. "Alongside this increase, savings rates are also enjoying an upwards trend.
"The primary focus is on the fixed rate market, mainly due to challenger banks competing heavily in this sector. Challenger banks who have been in the market for a while are seeing some of their older fixed rates start to mature, and as a result, savers coming to the end of their deal can start to look elsewhere. Instead of losing a substantial chunk of their savings book, challengers are opting to launch new deals or up their rates to entice customers to stay or even join them."
However, there's still a long way to go before we return to a time of truly competitive returns. Indeed, despite a significant increase in choice and the recent uptick in rates, "savers looking for worthwhile deals still have to contend with rising inflation and little difference between the interest rates on offer from the best deals," said Charlotte. "Until something forces the main banks to join the fray again, this feeling is likely to remain."
Hopefully, it won't be too long before something forces them to do just that – the Bank of England has recently asked banks to increase their capital buffers, which essentially means that banks need an extra financial cushion should another downturn hit. One of the easiest ways for them to build that kind of emergency fund is to get more savings deposits, so it's hoped that this will act as the catalyst for the big banks to start offering better deals.
However, as Charlotte points out, "banks have some time to obtain the additional capital, [so] it is unlikely that savers will see a dramatic increase in rates anytime soon". This is why you still need to be proactive if you want to source the best deals – start the process by checking out our Best Buys to find the best savings rates available, and see if you can make the most of the increased choice.