August 2025’s savings round-up & news

August savings news

Easy access interest rates fall after base rate cut

Last week the Bank of England cut the base rate from 4.25% to 4%, and as a result many banks have passed on that change to customers.

The fastest were the tracker rate accounts, including Chip, Chase, Tandem and Kroo. A new addition to these ranks is Trading 212. These banks have either already dropped rates or will do in the next few weeks.

Also making cuts are many standard variable rate accounts, though they could reduce by more or less – it’s up to the bank.

Whether these and similar accounts should be ditched or not depends on a few things. First, are you getting a bonus? Many of these give a boost for the first year. If so, the rate could still be competitive, though of course you’ll want to compare.

And second, has the alternative you’re looking at recently reduced it’s rate? If not (though it’s not always easy to tell), you might find you transfer over your cash only to find they too lower what they’re offering.

It might be worth holding off for a few more days just to allow the banks time to communicate any potential reductions.

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Tax on savings interest to be deducted from wages

You might have seen headlines talking about Rachel Reeves’ “new way to tax savings”. That sounds worrying, right? We’ve already had rumours of changes to the Cash ISA allowance. Could this be cuts to the Personal Savings Allowance? Or perhaps abolishing it? Well actually, its nothing of the sort.

The Telegraph has reported that from 2027, you’ll have to provide your National Insurance number to banks, and they’ll then use this to report to HMRC how much interest you earn in a year. If you go over the Personal Savings Allowance, they’ll then claim any tax due straight from your pay.

This will help the banks and government keep track of all the interest earned, as apparently around 20% isn’t reported each year under current systems. If you already fill in a tax-return then you’ll continue to submit interest totals via self-assessment.

At the moment basic rate tax payers can earn £1,000 a year in interest tax free in accounts (in addition to ISA and Premium Bond returns), while higher rate taxpayers get a £500 allowance. Here’s more on the Personal Savings Allowance.

No change to ISAs… yet

While we’re talking about government plans and savings, it’s worth mentioning that those rumoured changes to Cash ISAs allowances weren’t announced as expected at the Mansion House speech in July.

The speculation was of a reduction to the Cash ISA allowance to somewhere between £4,000 and £10,000, while keeping the overall ISA allowance at £20,000 a year. The theory behind this was it could encourage more people to invest rather than save, which in turn (in theory at least), would help boost the UK economy.

Well, the backlash to this policy means consultation on changes to ISAs will continue. That’s not to say cuts still couldn’t happen, so if you have enough in savings it certainly makes sense to fill up as much of your ISA allowance this year as you can.

Whatever is decided, I’d imagine we’ll hear about it at the next Budget, likely to be in early November, before any changes take place next April.

Virgin Money 10% regular savers mature

Last year’s 10% regular saver from Virgin Money was pretty amazing, and if you opened this you’ll have just had the total and interest earned transferred into a standard Virgin savings account.

Make sure you move this out now into a higher paying account. If you don’t need to access the cash, you’ll probably get the best rate if you lock the money away in a fixed rate account.

You could consider putting it in a top paying easy access and drip-feeding it in to other regular savers, but it’s unlikely to make much difference to what you get at the end.

New Virgin Money regular saver pays 6.5%

Replacing the 10% account is a new issue paying 6.5%. That’s still pretty decent, and since it’s a fixed rate you’ll be guaranteed it won’t drop. It’s likely to close to new applicants on 28 August 2025. We’ve looked in detail at the Virgin Money 6.5% regular saver.

6% regular saver without a current account

One of the problems with most of the regular and monthly savers paying more than 6% is that you’re required to have a current account with the bank. That’s not really an issue for most, but it does require a credit check to open these initial current accounts, while some have fees and conditions too.

So Monmouth Building Society’s new 6% paying account is a good option if you don’t want that extra admin. It allows up to £500 a month in deposits too, which is heftier than all other options.

However, I’ve had issues applying. You have to do this via their app (unless you live locally when you can do it in branch), and it didn’t recognise Starling as a bank, which disrupted my application. I had to get in touch via the phone and send a copy of my bank statement. That should have fixed it but didn’t, so I’ll need to call up again.

Virgin Money offers 5% to kids

If you have or open a Virgin Money M Power Child bank account, they’ll be able to earn 5% on balances up to £5,000 in a linked savings account (it’s only 1% in the current account itself).

The account is available to 11 to 15 year olds, though parents or guardians will need to have their own Virgin Money current account to open one.

Barclays to cut Rainy Day saver rate AGAIN

For the third time this year, the Barclays Rainy Day Saver is being reduced. What was once right near the top at 5% on balances of up to £5,000 now pays 4.36%.

Though many other banks have reduced rates after the base rate cut, you can still do better than this, without the limitations.

And if you get this saver via the Blue Rewards adds on, you’re also paying £5 a month for the privilege, which really cuts down what you get. In fact, the best you can get in reality is 3.08%.

Only those who access it via the Premier Bank account won’t pay this charge and get the full 4.36% AER.

Premium Bond prize rate has dropped

A reminder that the draw at the start of this month was at the lower 3.6% rate. If you’re not happy with this, I’d probably wait until the September draw has happened and then move your money. Do it early and you’ve already missed a third of August in terms of earning interest elsewhere.

More than £100m in Premium Bond prizes unclaimed

NS&I have revealed that 2.5 million prizes have been unclaimed – though this goes back as far as 1957. If you’ve not got it automatically set up to send you or reinvest your wins, then you can check your account on the NS&I website.

If you’re unsure if you’ve got Premium Bonds or have lost the details, there is a tracing service you can use, or the My Lost Account service, which also looks at things like missing pensions and savings.

August’s savings offers

We’ll share any other deals in our savings deals page if any more come along.

Top savings accounts for August 2025

Remember, these are the accounts at the top of the tables. We’ve more options in our best savings accounts page, which is updated every day by the team.

Current account linked saver picks as of 11/8/25

• Santander Edge Saver (6% AER variable, includes 2% bonus for 12 months) – max £4,000
• Nationwide (5% AER variable for 12 months) – max £1,500

Easy & limited access picks as of 11/8/25

• Cahoot Sunny Day Saver (5% AER variable) – max £3,000, 12 months only
• Cahoot (4.55% AER variable) – 12 months only
• West Brom Building Society (4.55% AER variable) – rate drops after four withdrawals
• Cynergy (4.45% AER variable)

Easy access ISA picks as of 11/825

• CMC Invest (4.59% AER variable) – partial FSCS protection
• Moneybox (4.45% AER variable) – new customer rate only
• Trading 212 (4.42% AER variable) – new customer rate only
• Charter Savings (4.4% AER variable)

Notice accounts picks as of 11/8/25

• 3 months notice RCI (4.7% AER variable): 95-days notice
• 6 months notice Stafford Building Society (4.61% AER variable): 180-days notice

Fixed savings accounts picks as of 11/8/25

• 6 months Aldermore (4.63% AER fixed)
• 9 months GB Bank (4.5% AER fixed)

• 12 months Vanquis Bank (4.44% AER fixed)
• 18 months Cynergy Bank (4.33% AER fixed)

• 2 year JN Bank (4.45% AER fixed)
• 3 year JN Bank (4.45% AER fixed)

• 4 year JN Bank (4.4% AER fixed)
• 5 year JN Bank (4.52% AER fixed)

Fixed ISA accounts picks as of 11/8/25

• 12 months Chetwood Bank (4.31% AER fixed)
• 2 years Shawbrook (4.21% AER fixed)
• 3 years Shawbrook (4.22% AER fixed)
• 4 years UBL (4% AER fixed)
• 5 years Shawbrook (4.25% AER fixed)

Lifetime ISA pick as of 11/8/25

• Moneybox Cash Lifetime ISA (4.45% AER variable)

Regular Saver accounts picks as of 11/8/25

We’ve got a dedicated Regular Saver best buy article, so you can see further details and more rates there.

• Zopa Regular Saver (7.1% AER variable): min £1 / max £300 a month
  • requires a Biscuit (by Zopa) current account
• First Direct Regular Saver (7% AER fixed): min £25 / max £300 a month
  • requires a First Direct current account
• Co-operative Bank Regular Saver (7% variable): min £1 / max £250 a month
  • Requires a Co-op Bank current account
• Virgin Money Regular Saver (6.5% AER fixed): min £1 / max £250 per month
  • Requires Virgin Money current account