There IS a Budget silver lining: The charges on financial savings will keep greater

Savers are likely to be the big winners from Wednesday’s Autumn Budget. 

The barrage of enormous tax rises and spending increases will undoubtedly hit household finances – but the good news is that it should keep savings rates higher for longer.

Inflation is expected to remain slightly above the Bank of England’s 2 per cent target for the foreseeable future as a result. That means the Bank will take a more cautious approach to cutting interest rates than previously expected.

Winners: Savers are likely to be the big winners from Wednesday’s Autumn Budget 

Before the Budget, financial markets were widely expecting the central bank to cut the base rate from 5 per cent to 3.75 per cent by the end of next year.

Two cuts were pencilled in for the end of this year, with the first coming as early as next Thursday, to 4.75 per cent.

But now the Bank’s rate-setters are expected to sit on their hands for longer. Forecasters predict rates will reach 4 per cent by the end of next year, with only one cut before 2025.

That’s bad news for borrowers, but good news for savers.

Some banks and building societies have already nudged their rates higher since Wednesday. Trading 212 increased its rate from 5.1 per cent to 5.15 per cent, while

Sylvia Morris

Moneybox deals went up from 4.75 per cent to 5.15 per cent for new customers, including a 0.45 percentage point bonus for one year.

Paragon Bank launched a top-paying new account last month. The online account pays 4.87 per cent but limits you to making two withdrawals a year.

However, some banks that have had a wall of money flowing in have trimmed their rates. For savers, the advantage of cash Isas over ordinary accounts is that all your interest is tax-free.

With rates bobbing about all over the place, one thing is clear: check on your easy-access Isa to make sure you are earning a decent, competitive rate. If not (some pay dismal rates of less than 2 per cent), transfer your money to a better one.

Don’t transfer it yourself by cashing it in as you could lose the tax relief on your money. Instead, seek out a new provider and ask it to arrange the transfer for you – it should take no more than 15 working days.

Fixed-rate cash Isa deals have also been swinging up and down in recent days. Providers change rates on these accounts in line with the amount of money they want to bring in rather than reflecting the Bank of England base rate.

This week Aldermore withdrew its top-paying 4.5 per cent cash Isa for new savers, while Charter Savings Bank and Zopa trimmed their rates so as not to sit at the top of the best buy tables.

However, Shawbrook Bank, keen to attract your money, came out with a new one-year fixed-rate Isa at 4.5 per cent.

Two-year rates pay slightly less, but you can still earn more than 4.25 per cent. Cynergy Bank raised its rate to a top 4.3 per cent yesterday within hours of Hodge Bank’s increase to 4.27 per cent. 

The moves followed Shawbrook Bank pushing its rate up from a lowly 3.78 per cent to a then-top 4.27 per cent earlier this week.

The advantage of fixed-rate accounts is you know exactly how much interest you will earn during the term. On easy-access accounts you are likely to see your rate fall if the base rate is cut next week.

Make sure you are happy to tie your money up. With a fixed-rate cash Isa you can take it out during the term, but you pay a fee to do so.

If you have used your £20,000 cash Isa allowance up this year, you will have to go for an ordinary account, and you could end up paying tax.

Basic-rate taxpayers can earn up to £1,000 in interest before they must start paying tax, while higher-rate taxpayers can earn £500. Additional-rate earners have no allowance.

The top easy-access rates come from Chetwood Bank at 4.86 per cent followed by Ford Money at 4.75 per cent, where you can put money in and take it out as you wish and still earn these headline rates.

Atom’s new Instant Saver Reward pays 4.85 per cent, but the rate drops in any month you make a withdrawal, down to the equivalent of 3.25 per cent.

Coventry BS pays 4.83 per cent on its Triple Access Saver (Online) account and restricts you to three free withdrawals a year.

On one-year fixed-rate bonds, the top rate of 4.8 per cent comes from Union Bank of India, with the best two-year rate being Atom Bank’s 4.6 per cent. You can’t take your money out of these accounts during the term.