Savers across the UK are being urged to take immediate action with their Cash ISAs, following the release of new inflation data that reveals many are effectively losing money.
The Inflation Problem for Savers
The latest Consumer Price Index (CPI) figures from the Office for National Statistics, released this week, show inflation held at 3.6% for October 2025. This means the cost of living is rising, and the purchasing power of your money is falling at that same rate.
For anyone with savings, this creates a critical issue. If the interest rate on your Cash ISA is lower than the inflation rate, your money is shrinking in real terms. For example, if your ISA pays 2% interest but inflation is 3.6%, you are effectively losing 1.6% of your money's value each year.
How Cash ISA Rates Compare
Research from Finder highlights the severity of the situation for many savers. The financial comparison site reports that the average easy access variable Cash ISA in the UK currently offers a paltry 2.05%. This is significantly below the current inflation rate of 3.6%.
Finder's data provides further context: "The UK's average instant access savings rate was 2.23% as of October 2025. This is down from a 13-year high of 2.82% in January 2024. Meanwhile, the average variable cash ISA interest rate was 2.05% as of September 2025."
How to Beat Inflation with Your Savings
The solution for savers is to seek out accounts that genuinely outperform inflation. While easy-access accounts are lagging, fixed-rate ISAs are currently presenting a much stronger option.
Finder explains: "Savers can generally find higher rates in fixed-rate ISAs, where you lock your money away for a set period. The average savings interest rate for a 1-year fixed rate ISA was 3.98% in October 2025." A rate of 4% would mean your savings are finally growing faster than inflation erodes them.
Several providers are currently offering rates that beat the 3.6% benchmark:
- Trading212 offers an easy access Cash ISA at 3.85%, with a new customer bonus taking it to 4.51%.
- Monument Bank provides 4.51% variable or 4.47% fixed for 12 months (minimum £25,000 deposit).
- Cahoot (part of Santander) delivers 4.4% variable.
- LHV Bank presents a 4.46% fixed rate for one year.
By moving your money to one of these higher-performing accounts, you can ensure your savings are growing in value rather than diminishing.
