Brits may want to take swift action following the BoE’s decision to cut the base rate to 4.25% – which has resulted in several banks including Ulster and Monzo slashing their interest rates
Swathes of savings Brits have been dealt a major blow, after the Bank of England (BoE) announced it had cut the base rate from 4.5 per cent to 4.25 per cent. This is the interest rate that the bank charges other lenders when they borrow money, and in theory, means Brits will be charged less for lending.
The move will be a relief for households with a tracker mortgage, with experts predicting monthly payments should decrease by around £29. However, a lower base rate is bad news for savers – who have been cashing in on lucrative interest rates exceeding five per cent.
Ulster Bank, which is part of the NatWest Group, has consequently slashed its interest rates on a slew of its Non Payment and Payment accounts. It means Brits may want to transfer their money into a different account, or risk missing out on accrued interest.
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In email correspondence viewed by the Mirror, Ulster Bank said: “We want to let you know we’re changing the interest rate on your account(s). You may have heard the news that the BoE has decided to reduce the based rate. We’ve been looking at our rates too, as well as what’s on offer from other savings providers right now, and we’ve decided to reduce some of our interest rates.”
The shake-up does not impact Ulster Bank’s Cash ISA account. This currently offers 1.4 per cent interest for balances between £1 and £24,999 and a 2.70 per cent AER for balances above £25,000. (Remember, you can only save £20,000 in a Cash ISA per tax year). The Help to Buy ISA is however impacted, with interest rates slated to drop from 2.20% / 2.18% to 2.05% / 2.03% on May 30. This type of account is no longer available to open – and is different to the Lifetime ISA (LISA) which offers £1,000 bonuses every tax year.
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Ulster Bank’s interest rate changes – full list
The following accounts will keep their AER/ Gross p.a. (variable) until July 14, 2025. The decreased interest rate will come into effect on July 15.
Loyalty Saver
- Balance £1-£4,999: decreasing from 1.50% – 1.25%
- Balance £5,000+: decreasing from 4.25% to 4.00%
Private Reserve
- Balance £1 – £9,999: decreasing from 1.50%/ 1.49% to 1.25%/ 1.24%
- Balance £10,000+: decreasing from 4.25% / 4.17% to 4.00%/ 3.93%
urfirst
- Balance £1+: decreasing from 2.25% to 2.05%
Easy Access Savings Account
- Balance £1+: decreasing from 1.50% to 1.25%
Special Interest Deposit
- Balance £1-£15,000: decreasing from 1.00% to 1.75%
- Balance over £15,000: decreasing from 1.50% to 1.25%
Adapt Account
- Balance £1: decreasing from 2.25% / 2.23% to 2.05% / 2.03%
Ulster isn’t the only bank that will be making changes to its savings accounts following the BoE announcement. Monzo has already confirmed it is lowering its Instant Access savings from 3.50% AER (variable) to 3.25% AER (variable) on May 27. Moneybox, an app-only bank that is popular for ISA products, is also lower Moneybox Lifetime ISA from 3.55% AER (variable) to 3.30% AER (variable) on May 29.
*This article does not constitute financial advice. Always read the full terms and conditions before opening or closing a savings account.
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