On Thursday, November 6th, 2025, savers across the UK were met with yet another disappointment as the Bank of England’s Monetary Policy Committee voted to maintain the base rate at 4%. This decision, coupled with an inflation rate of 3.8%, makes it increasingly difficult for average savers to see real returns through traditional High Street savings accounts that are tied to the central bank’s base rate.
While this rate hold provides a sense of stability for mortgage holders and businesses, it also highlights a troubling reality: savers have been consistently overlooked in economic policy discussions.
The one-sided conversation
When it comes to interest rates, the media and policymakers tend to focus on the impact on borrowers. However, this leaves savers, who make up an integral part of the economy, out of the conversation. For years, households have struggled to earn real returns on their cash savings, while inflation remains high. This means that the average British household is struggling to generate wealth from their savings.
The mathematics of neglect
The decision to keep rates at 4% reflects the belief that current inflation levels do not warrant further tightening. However, for savers earning typical returns of 3-4% on traditional easy access Cash ISA savings accounts, higher inflation translates to a continuous loss of wealth. For example, a couple with £50,000 in cash savings earning 3.2% annually will see their money grow to £51,600 nominally. But with inflation at 3.8%, their purchasing power actually decreases.
This is not a temporary issue, but a structural problem that is impacting savers. Banks borrow from savers at low rates, lend to borrowers at much higher rates, and keep the difference as revenue. In this system, savers are the ones funding the entire lending system, but receive the least favorable terms.
Demographics matter
This problem is particularly concerning for retirees and pre-retirees who rely on their savings to supplement their pensions. When inflation surpasses returns, it directly affects their standard of living. Younger savers who are saving for a first home are also feeling the impact, as low real returns make it harder for them to reach their goals.
Both groups share a common frustration – following traditional financial advice to save regularly and avoid high-risk investments is no longer delivering satisfactory results.
Alternative approaches
In the absence of policy solutions, savers must take matters into their own hands. For those willing to do their due diligence and take on additional risk, there are alternatives available. Peer-to-peer lending, for example, allows investors to directly fund borrower loans without a middleman. While this is considered a high-risk investment, regulated platforms such as easyMoney prioritize risk management and have a track record of protecting investors’ capital.
Currently, easyMoney investors earn average annual returns of 5.4-10% (terms and conditions apply), which outpaces inflation and provides real growth.
Moving forward
Until economic policy gives equal consideration to savers and borrowers, individuals must advocate for themselves. This means researching alternative options, understanding risk-return trade-offs, and creating strategies that benefit the average saver and investor, rather than the banking sector’s profit margins.
The decision to keep rates at 4% confirms what savers have been realizing for some time – relief will not come from external policy shifts. Taking control of one’s finances means rejecting meager returns as an unavoidable reality.
Please note that capital is at risk when investing, and past performance is not indicative of future results. Additionally, tax treatment may vary based on individual circumstances and may change in the future.