Standard Life Search Radar: Huge spike in searches for best-buy savings accounts and Pension Credit shows the two sides of the year with 2023 also on course to be a bumper year for pension searches

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• Searches for ‘best instant access savings accounts’ and ‘best fixed rate ISA’ both increased by 234% in October
• Searches for ‘Pension Credit’ jumped 49%
• Pension searches trending higher in 2023 – up 91% year to date

Online searches for ‘best instant access savings accounts’ and ‘best fixed rate ISA’ both spiked 234% in October this year compared to 12 months ago, receiving over 33,000 searches each. There was also a sharp 49% spike in searches for Pension Credit compared to October 2022, according to new analysis from Standard Life, part of Phoenix Group.

The surge in saving account searches was almost certainly caused by the sharp and sustained rise in interest rates through this period. In October 2022, the Bank of England base rate was 2.25%. In October this year, it stood three percent higher, at its current level of 5.25% - giving people the opportunity to take advantage of the best chance of a decent return on their savings since the 2008 financial crash. In the second half of 2022 searches for ‘best instant access savings accounts’ hovered around 10,000 monthly, now they regularly average well over 20,000.

There were an additional 44,500 ‘Pension Credit’ searches in October compared to the same time last year with a total of 135,000 searches recorded. While the trend is good news in one sense as it’s often underclaimed and can be a vital lifeline for people of State Pension age on low incomes, it perhaps also shows the other side of the 2023 economic coin as rising interest rates are a consequence of the same cost of living crisis that has led to more people needing help.

Pension searches trending higher in 2023
Another notable trend for 2023 is the uptick in ‘pension’ searches. In the first ten months of this year there around 970,000 searches for the term compared to around half a million over the same time last year. It has been an eventful year for pensions which may explain the jump with the abolition of the lifetime allowance, increases in annuity rates, speculation about the future of the state pension and proposed reform of auto-enrolment to name just a few of the issues that may have driven the increase.

Saving in a higher-interest environment
After 15 years of very low returns for savers, there are now some easy access cash-based savings accounts offering around 5% interest, and some fixed options approaching 6%. While this will mean real returns for savers, Standard Life analysis found that with inflation at 4% a £10,000 pot earning 5.5% interest would be worth just £10,258 after two years in real terms. If inflation fell back to the Bank of England’s target of 2%, as its forecast to do early next year, a £10,000 pot would be worth £10,689 after two years.

Growth on £10,000 earning 5.5% in a cash-based savings account

For those with a greater appetite for risk, investing offers a greater chance of substantial returns, but there’s always the chance of losing money too.

About Pension Credit
Pension Credit is a state benefit for people of State Pension Age and on low incomes, topping up single people’s weekly income to £182.60, or a couple’s joint weekly income to £278.70. It can help with living costs and can also help with housing costs such as ground rent or service charges. It’s separate from the State Pension and people can get Pension Credit even if they have other income, savings or own their own home. The DWP estimate up to 1 million households who are entitled to Pension Credit do not claim it.

Dean Butler, Managing Director for Retail Direct at Standard Life, part of Phoenix Group said: “It’s been another tumultuous year for people’s finances and the dichotomy between opportunity and struggle appears to be on display in these search trends. While some people are in prime position to take advantage of better savings rates, people who have mortgages, rent or have unsecured debt like credit card arrears have been hit hard with rising interest rates quickly following inflation.

“With interest rates generally expected to stay around their current level for at least the first part of 2024, but then start to fall, now might well be a good time for savers to grab a good deal before they’re gone. Of course, there’s no guarantee this will happen in reality. Whatever the new year holds, we’ll hopefully see a bit more stability than we have in the last two. This would benefit nobody more than people on low incomes requiring a bit of extra help to get them through. We would urge anyone who’s struggling to check eligibility on the Government’s benefits calculators page or speak to a benefits adviser to make sure they’re getting all possible help – despite the circumstances, it’s good to see people are becoming more aware of Pension Credit.”

“The scale of the increase in searches for ‘pensions’ this year compared to 2022 is likely a result of the Government’s focus on pension policy as well as ongoing speculation around the State Pension triple lock. Hopefully it’s also a sign that people are starting to engage more with their retirement savings.”

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