Martin Lewis has issued an alert to savers in the wake of interest rate changes this week - and told one listener that taking action would net her £3,300 more a year. The personal finance guru spoke out after they Bank of England has cut interest rates to 4.25% after a slowdown in inflation.

The Bank said it reduced the rate - which helps to dictate mortgage rates - after a recent easing of inflation, while it also reduced its inflation forecast for the rest of 2025. But it also downgraded its economic growth prediction for next year, warning that an escalating global trade war will drag on growth over the next three years.

Speaking on his , cash ISAs and fixed rate savings accounts. And he warned that people need to take action 'today' to avoid missing out on money.

Variable rate savings

On variable rate savings accounts he said: "Variable rate savings which are mainly easy access with those accounts where you put your money in and take it out when you like will likely drop in 2-4 weeks by around a quarter of a per cent. Some may drop it more than that because they don't have any promises and they might use a competitive advantage of rates dropping everywhere to shave their rates down, especially the big high street banks whose rates are already pants."

Cash ISAs

Mr Lewis said people with cash ISAS will see the 'death knell' of 5 per cent interest rates. He said: "I'm also hearing that we've had this price war on easy access cash ISAs mainly due to 'ISA season' which is around the beginning of April when we see the end of the tax year and the start of the next tax year. So even though base rates are only 4.5 per cent we've seen the top easy access cash ISAs at over 5 per cent. I think this will probably see the death knell of over 5 per cent savings. Certainly in the cash ISAS - there'll still be some regular savers which are a loss-leading product - you can't put too much money in.

"But I think we'll probably start to see rates below 5 per cent now. And they're going to move in the next 2-4 weeks. Savings rates they have to notify you in advance but they can move them pretty quickly so we're going to see easy access rates both the ones being offered and your existing accounts coming down."

Fixed rate savings

On these Mr Lewis said people need to take action 'today'. He explained: "Fixed rates savings tend to factor in future interest rates so they're already lower than the easy access rates at the moment they've factored in much of the cuts but here's the key thing I think for two reasons. If you're looking to fix I would be fixing 'today'. Or if you're listening on the podcast - the moment that your're listening to this.

"Because when a base rate cut happens while fixed rates get lowered, the way savings providers tend to operate with fixes is they offer a tranche. So they'll say we've got, and I'm making this up, 'we'll offer £5 million of savings at 4.6 per cent and once we've got £5 million in then we'll look and reestablish what our new fixed rate savings is.'

"So you may be able to get in now before the rate drops and they reassess based on the new information at slightly higher fixes than you'll be able to get in aeek or two's time and because it's a fix your rate is locked in. The safest bet is to do it today and also as a general point because analysts are predicting interest rates are going to come down quite substantially over the next year but the markets expect that but they don't factor it all in because it's uncertain. If you're risk averse to rates going much lower and you don't need the money and you don't need access to it then the safest thing to do if you've got savings is to lock it away in the highest rate fix that you can get now."

Listener losing out to the tune of £3,300

Host Adrian Chiles asked a question from a listener: "I have savings of £80,000 but only receive 1.36 per cent interest in my ISA. I've never taken money out of it for years. Now the base rate is changing my rate will change also can you recommend a better way to invest this money."

Mr Lewis said: "The problem isn';t that you've got it in a cash ISA - the problem is you've got it in a pants cash ISA." He explained that people often think that once their money is in a cash ISA it's locked away and they can't touch it, but he said people don't have to stick with the same provider. He suggested the person should do a cash ISA transfer - and whatever they do they should not take it directly out.

He said: "You're earning 1.36 per cent. You could be earning getting on up to 5 per cent on £80,000. That's £3,300 a year more interest, keeping it within the cash ISA, same level of risk but you're just earning three times the amount.

"Do not let cash ISA providers hypnotise you into thinking once your money's in it's a done deal and if you take it out you lose your cash ISA. You have a legal rt