If you draw an income from your savings, it could go down each time the Bank of England reduces the base rate depending on the product you have.

If you hold savings in a current or instant access savings account, you could assess your fixed-term savings options as you could get a higher rate locked-in for a specific period. It’s worth keeping in mind, though, that you wouldn’t have access to the money until the term had finished.

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There are lots of options worth considering. They include investing, if you haven’t already done so. Investing could potentially offer a higher return over a longer period, and there are options to match the appropriate level of risk you may want to take to achieve your goals.

Find out more about your potential investment options

The value of investments can fall as well as rise and you may not get back what you put in. Past performance should not be taken as a guide to future performance. You should continue to hold cash for your short-term needs. Eligibility criteria and T&Cs apply. Fees and charges may apply.

An instant access savings account remains an effective way to manage your money, particularly as you can access it whenever you like. But it’s likely to earn less interest if there are rate cuts, and may not always keep pace with inflation over the longer term. So, it might be time to consider other saving options or investments, if you’re able to put the money aside without touching it for a while.

We recommend having at least six months’ worth of your current expenditure, plus any extra one-off payments you may have planned, set aside and easy to access. Even if rates go down, having this cash to hand in case you need it is important.

Now could be a good time to assess where to put any extra cash based on your goals. A fixed-term savings account could guarantee a set return over time, while lower rates could mean growth for investments. Lower rates generally tend to lower company borrowing costs while encouraging people to buy their products, which can be positive for share prices.

You could also consider adding the cash to your pension to ensure you’re making the most of any tax allowances that may be available to you. 

Tax reliefs referred to are those applying under current legislation which may change. The availability and value of any tax reliefs will depend on your individual circumstances.

Lower rates might be a good time to assess your mortgage options. There may be different mortgages available which could help you achieve a lower rate depending on your goals.

Think carefully before securing other debts against your home. Your home or property may be repossessed if you do not keep up repayments on your mortgage.
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Historically we have seen lower interest environments support markets. If you have money you can invest for the long term – usually five years or more –  it could be worth considering a portfolio or fund. There are various options to consider, designed to provide a suitable level of risk for what you want to achieve.

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