The Bank of England’s Monetary Policy Committee has voted to hold the base rate at 4.50% in March.
Rates have only been cut three times since summer last year, with the first reduction having been made in August 2024 and the second in November. The Committee voted by 7-2 to reduce the base rate by a quarter point this month, with two members voting for a half a percentage point cut. The news is disappointing for homeowners on tracker and other variable mortgage rates, who won’t see any reduction in their monthly costs. It is more positive for savers, however, who have a wide choice of accounts offering inflation-beating returns.
The past few years saw rates rise 14 times in a bid to curb rampant inflation, but with inflation easing toto 2.8% in February) The Committee decided to pause rate cuts for now.
Myron Jobson, Senior Personal Finance Analyst at Interactive Investor, said: “The decision to hold interest rates was a no-brainer for the Bank of England. Inflation is expected to creep even higher in the near future, fuelled by higher utility bills from April, while wage growth remains strong, with the latest inflation labour market data showing that real wages continue to outstrip inflation. And that’s even before factoring in President Donald Trump’s tariff wars, which could push prices up even further, even if they are not directly imposed on the UK, because they add to supply chain costs.
“When the Bank of England will cut interest rates next remains the burning question. The financial markets are pointing to May – although there are no guarantees. The Bank would prefer to cut the base rate in response to easing inflationary pressure, but a string of disappointing economic data could force its hand, with GDP growth – or the lack thereof – remaining a key concern.
“Another layer of complexity for the UK’s central bank is that it takes up to 18 months for interest rate changes to have their full effect – meaning monetary policy needs to anticipate the state of the economy at that time. This is tricky to accomplish at the best of times, let alone amid the current period of heightened geopolitical and economic uncertainty.”
Here, we explain what rates being held at 4.50% in March might mean for you, and how it’s likely to impact your finances.
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Your savings
Savings rates remain competitive for now, but it’s still important for savers to take advantage of high returns whilst they’re still available.
Alice Haine, Personal Finance Analyst at Bestinvest for Evelyn Partners said: “With the potential for further interest rate cuts this year, anyone with money idling in an account offering an ultra-low return should hunt out a better deal while interest rates remain relatively competitive.
“Remember, the end of the tax year is just around the corner and those with large sums stashed in a regular bank or building account, putting them at risk of breaching their Personal Savings Allowance, might want to consider a more tax-efficient approach.
“Many savers are still making a real return on their savings, once inflation is factored in, but it is the post-tax net return on that cash that savers need to consider. Increasing numbers of taxpayers are being dragged into higher rates of tax as their incomes increase, a result of most personal tax thresholds remaining on hold until at least 2028, so, for taxpayers in the higher bands in particular, real returns net of tax may only be marginally positive even on the most competitive accounts.
“Add in drastic cuts to capital gains and dividend allowances at the start of this tax year and Chancellor Rachel Reeves’ ‘painful’ tax hikes in her maiden Budget and choosing a more tax-efficient option for savings and investments, such as an ISA or pension, is a no-brainer.”
You can find the current best fixed savings rates in our article Fixed rate savings bonds explained and the best cash ISA rates in our guide Best cash ISA rates – which cash ISAs pay the most interest?

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Those with longer-term savings goals – more than five years and preferably at least 10 – and who are comfortable accepting a level of risk, may want to consider investing some of their money in the hope of generating inflation-beating returns. However, remember that there’s a chance you could get back less than you put in, so investing isn’t for the faint-hearted.
Find out more about whether investing some of your savings could be right for you in our guide Investing – the basics.
What you can do
As mentioned, it’s essential to make sure your savings are working as hard as they possibly can for you, as often banks lure savers in with tempting rates only to reduce them a few months later.
Check savings websites such as SavingsChampion or Raisin*, or price comparison sites such as Moneyfactscompare.co.uk, uSwitch or GoCompare to see if you can find a higher interest paying account to move to.
If you have money in a fixed rate savings account and you think you could do better elsewhere, check what the penalties are for closing your account. In some cases it may just be a few months’ interest and you may be better off moving your money to an account paying higher returns.
Your pension
If you’re approaching retirement and considering using some or all of your pension savings to buy an annuity to provide you with an income, no change to the base rate is positive news.
Helen Morrissey, head of retirement analysis at Hargreaves Lansdown, said: “An interest rate hold spells good news for the annuity market. Interest rates are one factor determining rates and this is why we have seen incomes soar in recent years. A 65-year-old with £100,000 can currently get up to £7,585 per year from a single life level annuity according to HL’s annuity search engine. This is close to an all-time high. It’s seen the annuity market step out of the shadows and take centre stage with more retirees looking at whether now is the time to take the plunge and fix a guaranteed income for life.
“It’s important to do your research though. Once bought, an annuity cannot be unwound and if you make a mistake you could be left regretting it for years to come. Different providers offer different rates so don’t just accept the first quote, use an annuity search engine to see what the market can offer you. Also be aware of what you need the annuity to do. If you need it to supply an income to a spouse or rise in line with inflation over time then there are options for that though your income will be lower. Taking the time to see what’s out there will make sure you get an annuity best suited to your needs.”
Find out more in our articles Annuity rates jump to 16-year high – is now the time to buy?, Annuities explained and Why it pays to shop around for your annuity.
If you’re considering seeking professional financial advice on the options available to you, we’ve partnered with nationwide independent advice firm Fidelius to offer Rest Less members a free initial consultation* with a qualified financial advisor. There’s no obligation, however if the adviser feels you’d benefit from paid financial advice, they’ll talk you through how that works and the charges involved.
Fidelius are rated 4.7 out of 5 from over 1,500 reviews on VouchedFor, the review site for financial advisors.
Your mortgage
The Bank’s decision to keep the base rate at 4.50% is less positive for homeowners, many of whom are facing a sharp jump in their monthly payments when their fixed rate deals come to an end.
However, Oliver Dack, spokesperson at Mortgage Advice Bureau said: “Although the Bank of England’s Monetary Policy Committee chose to hold the base rate on this occasion, borrowers still have reason to be optimistic as the general consensus remains that we’ll see further cuts this year.”.
You can find out about remortgaging in our article Should I remortgage now? and why mortgage rates move even when the base rate has stayed the same in our guide What are swap rates and how do they affect my mortgage?
What you can do
If you’re on a standard variable rate (SVR), you should remortgage to a cheaper deal if possible, as SVRs are usually the most expensive mortgage rates. You might also want to start looking round for a new deal now if your current mortgage deal is due to end in the next few months, as you can usually secure your next mortgage three to six months before you want it to begin.
If you’re planning to remortgage and are looking for a place to start, we have a mortgage affordability calculator, which will give you a rough estimate of what you might be able to afford, based on current market conditions.
Once you have a rough estimate, it can be helpful to compare different mortgage options to understand what your monthly repayments are likely to be.
Unless your situation is very straightforward, you may want to seek professional advice from a broker to find the best mortgage option for you. The advantage is that they will know which banks and building societies are more likely to accept your application. It’s definitely worthwhile if you are self-employed (unless you have been so for years) or your credit rating isn’t excellent.
Want to speak to a mortgage advisor? Speaking to an experienced mortgage advisor can help you to understand your options and get a great deal on your mortgage.
If you’re looking for expert mortgage advice, you can get a free consultation with an independent mortgage adviser at Fidelius. Speak with a qualified, FCA-regulated, independent mortgage adviser you can trust. Rated 4.7/5 on VouchedFor from over 1,250 reviews.
If you’re finding it hard to keep up with your mortgage repayments, please don’t suffer in silence. Our article What can you do if you can’t pay your mortgage? explains what to do if you’re struggling with higher costs.
Your credit card and loans
Borrowing costs are likely to remain high for now so it’s important not to take on more debt if you can possibly avoid it.
Alice Haine said: “Uncertainty about the wider economic outlook and the future of interest rates still reigns, so running down emergency funds or borrowing to fund a major lifestyle cost should always be assessed very carefully to ensure repayments are fully affordable over the long term.”
What you can do
If you’re paying a high rate of interest on your credit card borrowing, try and get a 0% balance transfer credit card deal, so that you can pay off what you owe without being hit by hefty interest charges. Remember though that you must try and clear your balance in full before the introductory 0% period ends, or you’ll start being charged interest.
If you can’t get one, you have the right to reject the interest rate rise within 60 days and close your credit card account. The credit card company must then give you a reasonable time to pay off the money you owe.
If you’re worried that you won’t qualify for a 0% credit card deal, there are several credit checker and credit matcher tools available – and some credit card companies will also give you an indication of whether you’d be successful before you apply.
You can find the current best balance transfer credit card and personal loan rates in our guide Balance transfer credit cards and personal loans compared.
If you have a loan which you want to pay off quickly, lenders must allow you to do this, although you may be charged an early repayment penalty to do so. Lenders can charge you up to two months extra interest if you choose to pay back your loan off sooner than planned. If your loan has less than 12 months left to run, they can only charge you a penalty of up to one month’s interest if you pay it off early.
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