Savers expect interest rates to rise

Figures from Santander Savings' latest quarterly savings barometer - Savings Snap Shot - reveal that seven in 10 (68 per cent) of Britons are expecting the Bank of England base rate to increase over the next twelve months. In fact, 11 per cent people predict an increase from the current rate of 0.5 per cent up to 2 per cent or higher.

Santander Savings is predicting a shift in demand towards savings accounts that track the base rate over the next 12 months and has recently launched new issues of its competitive Loyalty Tracker Bond and Tracker Bond for those savers keen to not miss out on any rises in the base rate.

With the average savings account now consisting of over £20,000, a forward-thinking 37 per cent of Brits say they already plan to keep their savings in a rate tracker account in order to take advantage of any movements in the base rate.

However Snap Shot also reveals that the Briton is now saving £102 each month - a figure that has fallen by a fifth (21 per cent) since February of this year.

Reza Attar-Zadeh, Director of Savings and Investments at Santander, commented:  "There's clearly a widespread expectation amongst consumers that the Bank of England's base rate will rise over the next year. We're really pleased to see that so many people are already planning to take advantage of these predicted movements by ensuring that their money is saved in an account that tracks the base rate. For those savers looking to make the most of any base rate rises the Santander Loyalty Tracker Bond and Tracker Bond offer the perfect solution."

Santander's new issues of its competitive Loyalty Tracker Bond and Tracker Bond, are now paying 3.25 per cent and 3.00 per cent gross AER respectively.  The accounts track any changes in the Bank of England base rate for 1 year, meaning that if interest rates start to rise over the next 12 months, customers will benefit from the increase.

Reza Attar-Zadeh continued: "We're always looking at ways in which we can reward  our customers. The Loyalty Tracker Bond has been specifically designed for existing Santander customer to get a better deal but anyone who switches their banking to us can also benefit. To ensure a ‘painless' transfer when switching current accounts, Santander has a dedicated Account Transfer Service which is helping to take the hassle out of switching and provide a seamless transfer for those who switch to us."

At present, 34.4 million (70 per cent) adults in the UK have cash savings, with the average Brit holding £20,800 in total. That leaves a worrying 14.7 million adults in the UK with no savings at all. An additional 5.9 million people (12 per cent) say that despite having savings, they are not making any monthly deposits.

Encouragingly, one in four adults is planning to increase their monthly deposits over the next three to six months. Just 5 per cent plan to decrease the amount they set aside each month and the remaining 70 per cent plan to maintain their current level of saving.