Savers in the UK have reason to celebrate as interest rates on various accounts have climbed to their highest levels in around 15 years, according to data from financial information firm Moneyfacts. However, on the flip side, young drivers are grappling with soaring car insurance costs, which have surged by approximately 50% in the past year.

Savers Reap the Rewards:

Moneyfacts’ latest analysis reveals that average interest rates across different types of savings accounts are on the rise. Here are some key highlights:

1. Easy Access Accounts: The average rate for easy access savings accounts has reached 2.95%, a level not seen since November 2008 when it stood at 3.63%.

2. Notice Accounts: Notice accounts are also seeing improved rates, with an average of 4.04%. This breaks the 4% threshold for the first time since March 2008.

3. ISA Accounts: For Individual Savings Accounts (ISAs), the average rate for easy access accounts has risen month-on-month to 3.04%, hitting its highest point since December 2008 when it reached 3.74%. Notice ISAs are not far behind, reaching a rate of 3.89%, surpassing the 4.91% mark seen in November 2008.

Young Drivers Face Insurance Woes:

In contrast to the positive news for savers, young drivers are grappling with steep increases in car insurance costs. Research from comparison site Compare the Market reveals the following concerning trends:

1. Cost Surge: The average insurance premium for drivers under 24 soared to £1,792 in August, marking a staggering 50% increase from the same period last year when it was £1,198.

2. Financial Burden: Car insurance costs now represent nearly two-thirds of the total expenses associated with running a car for young drivers.

3. Claim-Related Premiums: Young drivers typically face higher insurance premiums due to their higher likelihood of being involved in accidents and making claims.

Advice for Young Drivers:

To mitigate the financial impact of rising insurance costs, experts advise young drivers to shop around for the best insurance deals available. While these price hikes are significant, finding more affordable coverage is still possible.

Julie Daniels, a motor insurance expert at Compare the Market, emphasises the importance of young people exploring their insurance options to ensure that driving remains financially viable, particularly in light of the broader cost-of-living crisis.