Savings Guide: High street banks lose £100bn in savings to challengers - here are the best rates available
Anna Bowes, personal finance expert from The Private Office, takes a look at the challenger banks shaking up the savings market.
Wednesday 6 August 2025 17:44, UK
High street banks have been losing substantial deposits to other savings providers, including challenger banks and building societies.
Accountancy firm KPMG found the banks have lost out on the equivalent of £100bn in savings as savers seek better returns.
It's encouraging to see savers recognising that many traditional providers are unlikely to be offering them fair value.
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With two base rate cuts by the Bank of England so far this year (and another one expected tomorrow), all the major high street providers have cut the rates they are paying on their standard easy access accounts, some multiple times.
Barclays is the latest to cut the rate it's paying on its Flexible Saver account - it is now paying savers just 1.11% AER.
HSBC cut the rate on its Flexible Saver to 1.30% AER on 21 July.
NatWest is another high street bank to have made cuts recently, setting a new rate of 1.15% on balances between £1 and £25,000, and 1.7% between £25,000 and £100,000.
It's not only high street banks making cuts. Earlier this year, the top unrestricted easy access account - offered by Gatehouse Bank - paid 4.75%. Today, after two base rate cuts totalling 0.5%, it pays 3.9%.
The key difference is that while challenger banks may have also cut rates, often they continue to offer much more competitive returns.
The top easy access rate now available is via Chase and is actually higher than the top rate at the beginning of the year, though the next best rates are now a little lower.
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There are many accounts paying 4% or more, so someone with £10,000 in savings could earn around £300 more over 12 months simply by switching to a lesser-known provider.