Inflation cools to 3.2% as savers gain ground with thousands of accounts beating inflation

Inflation cooled to 3.2% in the year to November, down from 3.6% in October, according to the latest Office for National Statistics data. The rate remains above the Bank of England’s 2% target, and core inflation eased to 3.4% in the 12 months to October. Analysts say the slowdown is driven in part by lower food prices, even as the overall cost of living remains high for many households.

Against that backdrop, savers have more ammunition to protect purchasing power. Moneyfacts Compare data show 1,512 savings accounts currently beat CPI inflation. The mix includes 153 easy-access accounts, 145 notice accounts, 125 variable-rate ISAs, 350 fixed-rate ISAs and 739 fixed-rate bonds. The top easy-access account pays 4.35% and the best one-year fixed-rate yields 4.51%, both still well above the CPI rate of 3.2% and beating inflation by roughly a point or more.

Moneyfacts notes that the market’s average savings rate sits at about 3.5%. Caitlyn Eastell, a spokesperson for Moneyfacts Compare, says inflation has averaged 4.01% this year and that the average savings rate has trailed, leaving cash savers financially worse off in real terms. For a saver with £10,000, the difference equates to about £50 over the year in real terms, illustrating why shoppers should actively seek the best available rates.

Looking back, the number of deals that beat inflation has grown from a year ago: 1,127 such deals in December 2023 when inflation ran 3.9%, rising to 1,582 in December 2024 when inflation stood at 2.6%. The current month shows 1,512 deals beating 3.2% inflation, underscoring persistent competition in the savings market.

At a glance, the leading options include easy-access accounts from providers offering about 4.35% (top easy-access), Kent Reliance offering 4.51% on a one-year fix and 4.42% on a two-year fix, and Hampshire Trust Bank offering a 4.31% five-year fixed rate. In the cash ISA space, Trading 212 provides an easy-access Isa at 4.52%, while Charter Savings Bank lists 4.3% on a one-year Isa and 4.2% on a two-year Isa. Providers note that the products are independently selected and reflect current deals that can move quickly as rates adjust.

The savings landscape remains dynamic even as inflation cools. Some savers face a choice between fixing for longer-term security or keeping funds flexible for opportunistic rate moves. Analysts say the best strategy is to shop around and, where possible, switch to higher-yielding accounts. The top rates available now can outpace inflation by more than 1 percentage point, helping preserve real value for households that have cash on hand.

Savings rates have risen as part of a broader shift in the market, but a majority of accounts still pay less than ideal returns for many savers. Moneyfacts notes that the Moneyfacts Average Savings Rate at around 3.5% has lagged well behind the 3.2% inflation reading for much of the year, reinforcing the case for proactive rate shopping and, where appropriate, the use of fixed-rate products or cash ISAs to maximize tax-advantaged gains. For those with longer investment horizons, research from Janus Henderson has shown that investing can outperform cash in several long-run periods, despite occasional volatility.

Savers are also advised to consider their liquidity needs. Many personal-finance experts recommend maintaining three to six months’ worth of living expenses in an easy-access account to weather sudden costs or temporary income gaps. While fixed-rate deals can offer higher yields, they lock in funds for a set period and may incur penalties for early withdrawal. In contrast, cash ISAs can shelter interest from attack by the tax system, though tax rules and allowances can change over time.

The savings market remains highly competitive, and the onus is on savers to take advantage of it. Online switch processes have become simpler and faster, and many providers offer streamlined transfers that can be completed in minutes. The practical takeaway for households is clear: with inflation at 3.2% and a wide range of accounts beating that level, it pays to compare rates, understand the terms, and move funds to the best available deal when appropriate.Consumers should also be mindful of any affiliate disclosures attached to certain offers, and note that editorial independence remains a priority for the publications that compile these comparisons.