How the banks are poised to gobble your savings – again
Falling interest rates might sound like good news—but for everyday savers, they often spell trouble. Imagine a parent giving their child a bag of sweets.
Last time, the child scoffed the lot without sharing. They were, to put it mildly, greedy.
So, the parent warns them: behave, or face the consequences.
Now swap the child for a UK bank, the parent for the Financial Conduct Authority (FCA), and the sweets for the Bank of England’s interest rate cuts.
You’ve pretty much captured the state of British savings today.
In April 2025, the FCA is once again warning banks not to slash their savings rates too aggressively as the Bank of England moves to lower its base rate.
The difference between sweets and savings, however, is this: if the banks choose greed over fairness (as they often do), it won’t just be a few upset friends—it could cost everyday savers thousands in lost purchasing power.
The reality? If your money is sat idle in a traditional bank account, it’s at serious risk of losing value faster than ever.
Why the FCA is worried about your savings
The FCA’s scepticism towards banks hasn’t come out of nowhere.
Over the past few years, the story has been the same: when the Bank of England raised interest rates sharply between 2021 and 2023, banks were lightning-quick to pass those hikes onto borrowers via higher mortgage costs.
When it came to helping savers by raising deposit rates? They dragged their feet.
Meanwhile, inflation remains stubbornly higher at 2.6%, meaning many savers are losing value in real terms.
Now, with the Bank of England cutting the base rate to 4.5% on 20 March 2025, the FCA has warned banks not to cut savers’ rates faster than they raised them.
“[…]we will expect a clear explanation should we identify that a firm has changed its savings rates significantly more quickly and fully in response to interest rate reductions, compared to previous interest rate increases.” the regulator said.
If past behaviour is anything to go by, there’s every chance banks will continue putting profits ahead of customers.
What falling interest rates mean for your savings
Savings account holders face a double threat in 2025:
- Lower returns as banks reduce savings rates following the BoE cuts.
- Real-term losses as inflation outpaces the meagre interest they do earn.
At a 2.6% inflation rate and an average 2.45% savings return, money in traditional banks is already eroding.
And with further Bank of England cuts expected later this year, your savings could fall even further behind inflation unless you act.
The FCA’s intervention shows that regulators are aware of the risk. But awareness doesn’t guarantee protection.
Protecting your savings from falling interest rates
If you want to shield your savings from inflation erosion and falling interest rates, traditional banks aren’t the answer anymore.
TallyMoney offers a powerful alternative: asset-based savings linked directly to physical gold.
Each tally® represents ownership of 1 milligram of gold, securely held outside of the banking system.
Instead of relying on falling interest rates, the value of your tally® increases with the gold price—a historically strong hedge against inflation.
In fact, over the past 20 years, gold has delivered an average annual return of more than 10%.
Had you stored £10,000 in gold ten years ago, it would now be worth around £32,069—compared to just £11,268 if left in a standard UK savings account.
Realistic Savings Account Returns (and Why We Used a Generous Estimate)
For the sake of comparison, we’ve assumed a 1.2% average annual return for UK easy-access savings accounts over the past 10 years.
In reality, from 2015 until early 2022, most easy-access savings rates hovered between 0.5% and 1% — with some periods offering even less than 0.5%, especially during Covid.
It wasn’t until 2022–2023, when the Bank of England aggressively raised rates to fight inflation, that savings account returns improved slightly.
Our use of 1.2% as a blended rate across the full decade is deliberately generous—giving banks the benefit of the doubt. In truth, many savers would have seen even lower returns.
Important Disclaimer: This is for educational purposes only and does not constitute financial advice. Past performance is not a guarantee of future results.
Why Gold-Based Savings Matter More In 2025
This year, savers face significant risks:
- Lower savings rates due to Bank of England cuts.
- Inflation remaining stubbornly high.
- Banks showing little interest in protecting customer value, despite FCA warnings.
Physical gold ownership through TallyMoney gives savers a simple, secure way to sidestep these risks.
You get:
- Full ownership of your gold.
- Instant digital access to your wealth via the TallyMoney app.
- The ability to spend your tally® using a TallyMoney Debit Mastercard.
- Freedom from the banking system’s hidden fees and broken promises.
How to take action today
If you’re worried about falling savings rates, now’s the time to act.
Protect your savings with something real.
Protect your future with TallyMoney.
Start by opening your TallyMoney account today and see how easy it is to move your money into physical gold—with full access and full control.
