Why has my ISA rate dropped?

Why has my ISA rate dropped?

Usually for one of three reasons: an introductory or bonus rate ended, your provider cut a variable rate, or a fixed term came to an end and the balance moved to a lower default account. This page is about a Cash ISA, a savings account held inside an ISA, so the FCA’s rules for savings accounts apply to it. It names no provider and quotes no deal.

The first thing to find out is which of the three happened, because the fix is different for each. Your latest notice, statement or the account’s summary box will tell you.

Can your provider lower a Cash ISA rate?

It depends on whether the rate is fixed or variable.

A fixed rate is set for a specified term. The provider cannot change it during that term, so a fall in the market, or in the Bank of England’s Bank Rate, does not touch it while the fix runs. What changes is what happens at the end of the term, covered below.

A variable rate, which easy access Cash ISAs usually pay, can change in the circumstances the account terms set out. The FCA’s prescribed summary box for a savings account has a field headed “Can [name of firm] change the interest rate?”, which has to say whether the provider has that right and, if so, in what circumstances and how and when it will give notice. If your rate is variable, that field in the terms for your account is where the answer sits.

Did an introductory or bonus rate end?

A bonus rate is paid for a stated period, often the first 12 months, and the rate then falls to the account’s underlying rate. If your rate dropped on a neat anniversary, a bonus ending is the likely cause. The summary box field headed “What is the interest rate?” has to explain when each different rate applies, including an introductory rate that runs until a set date, so the account’s own terms will show the underlying rate you drop to.

A bonus is not a reason to avoid an account, but it is a reason to note the end date. Once the bonus ends, the question is simply whether the underlying rate is still competitive, or whether to move.

Did a fixed term come to an end?

At the end of a fixed term, many providers move the balance into a lower default or maturity account if you do not give new instructions. The summary box field “Can I withdraw money?” has to explain what happens when a fixed term ends. Your options are usually to take a new fixed rate, transfer to another provider, or withdraw, and the choice has consequences for the ISA wrapper.

For how maturity works, the default account, and the fact that switching to a new product with the same provider is not treated as a transfer, see what happens when a fixed rate ISA matures. For the wider choice between locking in and staying flexible, see fixed or easy access ISA.

Does the Bank of England base rate affect my ISA rate?

For variable rates, often, but not exactly, and only the provider decides. The Bank of England says its official interest rate, Bank Rate, affects the level of other interest rates in the UK, so when it falls, providers often cut variable savings rates, and when it rises they often raise them. The Bank also says Bank Rate is not the only thing that affects savings rates, and that rates may not move by the same amount.

As at 17 October 2026, Bank Rate is 3.75%, which the Monetary Policy Committee held at its decision on 17 September 2026. Its next decision is on 5 November 2026, followed by 17 December 2026. A fixed rate you already hold is unaffected by any of these, because it is fixed for its term. For more on how rates move, see will Cash ISA rates go up or down.

How much notice must your provider give before a cut?

The FCA’s Banking: Conduct of Business sourcebook sets the expectation. BCOBS 4.1 says that when a firm proposes a material change to a rate of interest that is to the customer’s disadvantage, it should give reasonable notice before the change takes effect, on paper or in another durable medium, and allow enough time for the customer to move their money if they want to.

Three points from BCOBS 4.1 are worth knowing:

• A rate cut is usually “material”. The guidance says a change to a rate of interest should always be considered material, except where the balance of the account is less than £100.
• The notice has to be clear. When the rate is decreasing, the heading of the notice should make clear that the rate of interest is going down.
• A reminder may be due. If the notice was given more than 14 days before the change, a reminder is expected within the 14 days before it takes effect.

This is FCA guidance on what reasonable notice looks like, not a single fixed number of days. The exact notice period for your account is set out in its own terms, so check those for the figure that applies to you.

How do you find out what your rate is now?

Three places show it:

• The latest notice or letter from your provider, which a material cut should have triggered.
• The summary box for your account, in the terms or on the provider’s site, under “What is the interest rate?”.
• Your statement or online banking, which shows the rate currently applied.

If you cannot find the rate, ask the provider directly. Knowing the current rate, and the underlying rate any bonus drops to, is what lets you compare it with what else is available.

What can you do if your rate has dropped?

For reference, the highest easy access Cash ISA rate in our table is 4.86% AER (variable), checked 30 October 2026. That headline rate includes a bonus, so check how long it lasts and what the account pays afterwards. Rates change often, so check our easy access Cash ISA table and the fixed rate Cash ISA table before comparing, and look at the underlying rate, not just a headline that includes a bonus.

If a better rate is elsewhere, you do not have to lose the ISA wrapper to take it. gov.uk says you can transfer all or part of your ISA to another provider at any time, to the same type of ISA or a different one, and that a transfer does not count as a new subscription. That means moving the money this way does not use any of your £20,000 allowance for the year. The key is to ask the new provider to arrange the transfer, rather than withdrawing the cash yourself, because money taken out of a non-flexible ISA loses its tax-free status. See how to transfer an ISA for the steps and timings.

A worked illustration shows why the rate matters. This is not a forecast and not the rate on any account. It compares the same balance at an illustrative 5% AER and 3.5% AER over a year, assuming the rate stays the same and nothing is added or taken out.

On £10,000, a drop from an illustrative 5% to 3.5% AER is £150.00 less interest over a year. Whether that is worth moving for depends on the gap between your new rate and the best rate you could get, any notice period, and any bonus you would start afresh. The Cash ISA interest calculator shows what any rate is worth in pounds over a term you choose.

The points that matter

Fixed rate

Cannot change in its term

A market or Bank Rate move does not affect a fix while it runs

Variable rate

Can change on the terms

The summary box says whether, and how notice is given

Notice of a cut

Reasonable notice

FCA guidance in BCOBS 4.1; a cut is material unless the balance is under £100

Transferring

No cost to your £20,000 allowance

A transfer is not a new subscription, per gov.uk