The ongoing conflict involving Iran could leave UK savers £275 worse off, even as interest rates on cash savings accounts are expected to rise in the coming months.
Impact on Savings
Analysis by Moneyfacts suggests that, in a worst-case scenario, savers could end up with £275 less in their savings than if the war had not started. Adam French, head of consumer finance at Moneyfacts, explained that in this scenario, savings rates could reach 4.75%.
For someone with £10,000 saved at a 4.75% interest rate, they would earn £475 in interest over the year. However, because inflation would be higher, they would be left £145 worse off in real terms.
Comparison Without War
Had the war not begun in February, the same cash savings would have earned £330 in interest. With inflation expected to fall, the saver would have gained £130 in real terms. This means they have potentially missed out on that £130 boost and also lost £145 in real terms, adding up to a total of £275.
Mr French warned that savers will be left in “an increasingly difficult position” if they see the real value of their cash “steadily eroded”.
Protection for Savers
Every bank or building society mentioned in this guide is fully UK-regulated and covered by the Financial Services Compensation Scheme (FSCS). From 1 December 2025, the amount protected if a provider goes bust increased from £85,000 to £120,000 per person, per institution (or £240,000 for joint accounts). The only thing to watch is that some brands share a licence, meaning the limit is shared.
Money Saving Expert, the site founded by BBC and ITV star Martin Lewis, said: “With easy-access accounts, you pay cash into them, then they pay you interest while the money's in the account and you can withdraw whenever you want – useful if you'll need to dip into them regularly.”
