There's something deeply frustrating happening in October 2023, and you've probably felt it in your wallet. The Bank of England's base rate tracker is sitting at 5.25%—the highest it's been in 15 years. Your mates are talking about it. The news won't shut up about it. And yet... the best savings ratess available to you are dropping.
It's like watching fuel prices at the pump spike while your petrol station quietly raises prices anyway. It doesn't make sense. But it's real, and it's happening right now. NS&I just pulled its blockbuster 6.2% savings deal. Other providers are quietly slashing rates. Some are closing branches entirely. And honestly, most financial coverage doesn't explain what's really going on or what you should do about it.
So let's talk about it properly.
Why Your Bank Isn't Passing On the Full Base Rate
This is the core issue, and understanding it changes everything about how you should approach your money in October 2023.
The base rate is NOT the same as the rates banks offer you. I know that seems obvious, but the gap between these two numbers has become so large that it's worth really unpacking.
When the Bank of England sets the base rate, that's the interest rate at which banks lend to each other overnight. It's a policy tool. It influences the economy. But it doesn't automatically flow through to your savings account.
Here's what actually happens:
Banks have operational costs. They have staff, buildings, technology, fraud prevention. They have to cover bad debts—people who borrow and don't repay. And crucially, they need to maintain profit margins. The difference between what they pay you (on savings) and what they charge borrowers (mortgages, personal loans) is how they make money.
In a high-rate environment like October 2023, something interesting occurs. Borrowers start to default more. If you've got a £300,000 mortgage at 4-5% and rates were 0.5% last year, that's a massive hit. People struggle. Bad debts rise. Banks become more cautious.
At the same time, savers wake up. They realise they can get 5%+ on savings. They start moving money around. Suddenly, banks don't need to compete for deposits anymore—they're getting money in from savers looking for the best rate. So why would they offer you 6% when they can offer 3.5% and savers will still come?
This is why you're seeing premium rates disappear even as the base rate holds high. NS&I pulled their 6.2% deal because they had more deposits flowing in than they needed. Other banks are doing the same quietly, dropping rates on new accounts while leaving existing ones alone.
And here's the kicker: the banks also know what's coming next. They expect the Bank of England to cut rates eventually. Why lock in a 6% rate for two years when you might be able to offer 4% next year? From their perspective, pulling premium deals now makes commercial sense.
The Three Sources of Returns in October 2023
With regular savings rates falling away, your income strategy needs to be three-pronged. And the good news is that all three are still viable—you just need to understand where they actually are.
regular savers Accounts: The Most Reliable (But Still Falling)
Regular savers remain one of the best-kept secrets in personal finance. These accounts pay you a fixed rate—historically around 5-8%—but only on money you deposit regularly (usually £100-500 per month).
The brilliant part is that regular saver rates have been more sticky than easy-access rates. Fewer people use them, so banks don't feel the pressure to cut them as aggressively. In October 2023, you can still find accounts paying 6-7% on regular deposits, which gives you genuine, guaranteed returns.
But here's what you need to know: they're disappearing. Not all of them, but the best ones. If you haven't started stacking regular savers yet, October is the month to begin. Each bank typically allows only one account, so you can build a portfolio over time—but you need to start now, before banks pull them.
The math is simple: £300 per month into a 7% regular saver gives you roughly £12.60 in interest per month, compounded. That's real money. That's £151 per year from a single account. Across five accounts, that's £755. And it's guaranteed.
Bank Switching Bonuses: Larger But Rarer
Switching bonuses are still available, and they're still substantial. In October 2023, you're looking at offers like Monzo's £1,200 bonus, Nationwide's £200, and Halifax's £225. These are significant lump sums that you won't get from savings rates alone.
But the calculus has changed slightly. When there were premium savings rates available, you could switch, get your bonus, and then earn 5-6% on the balance. Now, you're switching for the bonus, and then your money is earning 2-3.5% in an easy-access account. The one-off bonus becomes more important relative to the ongoing interest.
This means you should be more strategic about when you switch and where you hold the money between switches. If you're in a 14-day cooling-off period between accounts, you might park your money in a regular saver rather than an easy-access account. The difference between 2.5% and 6% over 14 days isn't huge, but it's not nothing either.
You should also be tracking whether the bonus is worth the switching effort. £1,200 is excellent. £100 might not be, unless you're also getting decent ongoing interest. Check the ongoing rates carefully.
0% Credit Cards and Stoozing: Still Powerful (But Changing)
This is where the news is interesting. As credit card interest rates rise—which they are, according to recent data—the gap between 0% card offers and savings account rates grows wider.
Let me explain: if you can get a 0% credit card for 18-20 months, and you stooze (put money in a savings account earning 5%+), you're locking in roughly 5% per year for nearly two years. That's a guaranteed return based on the interest rate spread.
The problem is that 0% cards are becoming rarer and harder to qualify for. Banks are tightening criteria as defaults rise. But if you can get one, and if you have the discipline to use it properly, stoozing is still one of the best returns available in October 2023.
The risk is rising, though. If you're carrying a balance on a credit card for any reason, the interest cost is now 20%+. So stoozing only works if you're financially organised enough to ensure the money earns interest and isn't accidentally left in a non-interest account.
Your October 2023 Action Plan
First, understand where you stand. Open our offers page and see what's actually available in the current market. Don't rely on assumptions about what banks are offering—things change weekly.
Second, prioritise regular savers. If you haven't started stacking them, October is the time. Aim to open one per month as you're able to. Set up standing orders immediately. You'll build a portfolio that generates genuine guaranteed returns regardless of what happens to savings rates.
Third, reassess your switching timeline. If you've got pending switches, consider whether you're switching into accounts with decent ongoing rates. If the bonus is £100 but the ongoing rate is 1%, you might want to wait or apply elsewhere. Use our eligibility checker to understand your options before committing.
Fourth, evaluate stoozing carefully. If you're a confident stoozer with existing 0% cards and the discipline to manage them, continue. If you're new to it, the rising costs and tighter eligibility make it harder to recommend starting now. But watch the market—this could change.
Fifth, consolidate your accounts. With branch closures coming and the banking landscape shifting, now is the time to organise your accounts. You don't want to be caught with money in an account about to lose its in-branch access when you need it.
Common Questions
Can I still earn 6% in October 2023?
Only in specific places: some premium regular saver accounts still hit 6-7%, and if you luck into a 0% card with good stoozing rates, you can achieve similar returns. But standard easy-access savings accounts? No, not anymore. You're looking at 3-3.5% most places.
Should I switch banks right now, or wait?
Switch if the bonus is strong (£500+) or if you're moving into an account with genuinely good ongoing rates (4%+). If you're switching into a 2% account for a £50 bonus, wait. Check our switching guide for a framework on this decision.
Are the branch closures going to affect my switching?
Likely, yes. Less severe verification in-branch means more online-only processes, which is slower and requires more documentation. Start your switches now if you've been planning them—don't wait until March 2024 when the closures begin. You'll face longer processing times.
Is it worth opening a regular saver if I only have £100 per month?
Absolutely. A single £100-per-month account at 6% generates about £30 per year. You won't get rich quick, but it's a guaranteed return in an increasingly uncertain environment. And you can stack accounts over time.
What should I do with my stoozing cards if rates keep falling?
Monitor them monthly. When the balance of risk shifts (when 0% cards become truly rare, or when easy-access rates drop below 3%), close them responsibly. Don't hold cards for the sake of it. Right now, October 2023, they're still worth having if you have them.
The October 2023 banking environment is confusing precisely because the messaging doesn't match reality. Base rates are high, but your returns are under pressure. Bank branches are closing, but switching is still valuable. Savings deals are vanishing, but some genuinely good rates still exist if you know where to look.
The key is to stop waiting for things to improve or worsen, and instead act on what's available right now. Regular savers. Switching bonuses. Stoozing if you're disciplined. That's your three-part strategy for the rest of 2023 and beyond.
Your money won't earn 5.25% sitting in a standard account, no matter what the headlines say. But with strategy, you can beat the system. And that's what we're here to help you do.