For once, higher rates have a winner. If you have money sitting in a savings account, or you are saving for a deposit, this week is for you. Then three quick things: why car finance payouts are still a year away, an energy plan that could make switching dearer, and a short word on life cover if you have a mortgage.
Savers can now earn over 5% Confirmed
The same pressures that pushed mortgage rates up are now paying savers. Moneyfacts says the average one year fixed savings bond pays 4.41%, its highest since September 2024, and the best one year bond pays 5.15%. The best fixed cash ISAs now pay over 5% too, up to 5.25%. Inflation was 3.1% in August, so the best deals are paying well above it.
| Account | Best rate this week |
|---|---|
| Easy access cash ISA | 4.80% (includes a 12 month bonus) |
| 1 year fixed cash ISA | 5.00% |
| 1 year fixed savings bond | 5.15% |
| 2 year fixed cash ISA | 5.08% |
| 5 year fixed cash ISA | 5.25% |
Moneyfacts figures, 13 and 14 October 2026. Best buys change every week, so check before you move money.
What it is worth. £10,000 in the top one year bond would earn about £515 in a year. At 3% it would earn £300, so that is about £215 more for the same money. Left in a current account paying nothing, you would miss out on all of it.
What it means for you
- Money doing nothing? Even easy access accounts pay well right now. Moving it takes minutes.
- Use your cash ISA allowance. Interest in an ISA is tax free. You can put in up to £20,000 this tax year, but from April 2027 the cash limit falls to £12,000 for anyone under 65. If you have savings outside an ISA, this year is a good time to use the full allowance.
- Saving for a deposit? Only fix for as long as you can leave the money alone. If you hope to buy in the next year, a one year fix or easy access account keeps it ready. First time buyers under 40 should also look at a Lifetime ISA, which adds a 25% bonus.
- Got a mortgage and spare savings? Compare your mortgage rate with what your savings earn after tax. If the mortgage costs more, overpaying can save you more. Most fixed deals let you overpay up to 10% a year without a charge, but always keep an emergency pot first.
Car finance payouts: don't expect the money before late 2027 Confirmed
The court challenge to the FCA's car finance compensation scheme will now be heard from 16 to 26 February 2027. Three lenders and a consumer group are challenging it. Until it is settled, lenders do not have to work out or pay compensation, so most people should not expect money before the second half of 2027.
The scheme covers car finance taken out between April 2007 and November 2024 where the dealer was paid commission. The FCA's current estimate is an average of about £830 per agreement.
- Not complained yet? You can do it yourself, free, directly with your lender. You do not need a claims firm.
- Offered an early "full and final" settlement? You do not have to accept it. Think about whether it is fair before you sign.
- Don't spend it yet. Leave it out of your budget until the money actually arrives.
Energy: a plan that could make switching dearer Proposed
On 16 October Ofgem started a consultation on switching back on a charge it used between 2022 and 2024. If wholesale energy prices fall sharply, the supplier you move to would have to pay your old supplier, to cover energy it had already bought for you. Ofgem says this protects suppliers from going bust in a volatile market and would not push up bills on its own.
MoneySavingExpert's Martin Lewis is against it. He says it works like a switching penalty, because the new supplier is likely to pass the cost on, so cheap switching deals would be less cheap. He thinks it could start as soon as November. The consultation closes on 29 October.
What it means for you: if you are weighing up a fixed energy deal, judge it on today's price cap, not on cheaper deals you hope will appear later. If you want your say, you can respond to Ofgem's consultation before it closes.
Rates watch, in brief Watch
Bank of England Governor Andrew Bailey said on Friday that the knock on effects of higher energy costs on wider prices look "quite subdued" so far, though it is too early to judge. Most economists still expect Bank Rate to rise from 3.75% on 5 November. The average two year fix is 5.96% and the five year 5.99%, barely changed despite a round of lender cuts. If your deal ends in the next six months, our fixed rate ending calculator shows what your new payment could be.
The dates to watch
21 October: September inflation figures
28 October: the Budget
29 October: Ofgem's switching charge consultation closes
5 November: the Bank of England's next rate decision
Life cover and the mortgage gap
Here is a simple question. If you or your partner died tomorrow, could the other one keep paying the mortgage? For a lot of couples the honest answer is no, especially where the mortgage was based on two incomes.
Life cover pays out a lump sum if you die during the policy. A few things worth knowing:
- Decreasing cover shrinks over time, roughly in line with a repayment mortgage, which usually keeps it cheaper. Level cover stays the same, which suits an interest only mortgage or leaving money for the family as well.
- Remortgaged or borrowed more? Check your cover still matches what you owe and how long you have left. Many people never update it.
- Death in service through work is a great extra, but it usually stops when you leave the job.
- Writing a policy in trust can get the money to your family faster and may keep it out of your estate for inheritance tax. Our guide on writing life insurance in trust explains how.
Not sure what you have or what you need? Our guide to life insurance and critical illness cover is a good start, or book a free chat with Debbie at DS Financial.
That is the week. The next big moments are the inflation figures on 21 October and the Budget on 28 October, and we will cover what they change when they happen. If you know someone with savings sitting in a current account, send them this page. And if anything here raises a question about your own mortgage or cover, drop us a line, or have a no pressure chat with Debbie at DS Financial.
General information, not financial, tax or legal advice. Figures correct at the time of writing (16 October 2026) and may change quickly. Savings rates are the best available to new customers as reported by Moneyfacts and may have conditions. Interest example is illustrative, before tax, on £10,000 over one year. Your home may be repossessed if you do not keep up repayments on your mortgage.
Sources: Moneyfacts, fixed savings rates rise (14 October 2026), Moneyfacts, weekly ISA roundup (13 October 2026), LawPlus, car finance challenges listed for February 2027 (13 October 2026), MoneySavingExpert, car finance latest (13 October 2026), Ofgem, Market Stabilisation Charge activation (16 October 2026), MoneySavingExpert, Martin Lewis on Ofgem's plan (16 October 2026), Reuters via AOL, Bailey on second round price pressures (16 October 2026), The Intermediary, Moneyfacts average mortgage rates (16 October 2026).