UK Personal Finance News: late July 2026

The picture for UK savers and borrowers pulled in two directions in the second half of July. Pay growth slowed and public borrowing came in lower, but mortgage rates crept back up and savings rates stayed unusually generous. Here is what changed and what it means for your money.

Pay growth slowed to 3.4% as unemployment held at 4.9%

The Office for National Statistics reported that annual growth in regular pay, excluding bonuses, eased to 3.4% in the three months to May 2026, with total pay up 4.3%. After inflation that is real growth of just 0.3% on regular pay, close to flat. Unemployment held at 4.9%. Cooling pay matters to anyone watching interest rates, because strong wage growth has been the main reason the Bank of England has held rates higher for longer. Softer pay data gives the Monetary Policy Committee more room to cut later in the year, which is good news for borrowers but a signal to savers not to wait for rates to climb further. If you are deciding how much to put away each month rather than chasing rate moves, see our guide to how much to invest per month. Source: ONS labour market overview, July 2026.

Fixed mortgage rates climbed back to June levels

Two weeks of increases undid a run of cuts and pushed average fixed mortgage rates back to where they sat in June. According to Moneyfacts, the average two-year fix rose to 5.59% and the average five-year fix to 5.61% by 24 July, after more than a dozen lenders, including the biggest high street banks, repriced upward. The trigger was a jump in swap rates as Middle East tension pushed oil above $100 a barrel. For anyone remortgaging or buying, the takeaway is that the downward drift in rates is not a straight line: if you find a deal that works, it is worth securing it, since most lenders let you lock a rate for months before completion and swap to a cheaper one if the market falls again. Source: Mortgage Strategy on Moneyfacts data, 24 July 2026.

Fixed savings bonds reach their highest since 2024

Savings rates have shrugged off the earlier rate cuts. Moneyfacts data at the end of July showed the best one-year fixed bond paying 4.92% AER from GB Bank, with three and five-year fixes reaching 5.00% from Investec and Atom Bank, described as the highest bond rates since 2024. Top easy-access accounts still reach around 5% once introductory bonuses are counted. This is worth acting on while it lasts: locking a fixed bond or fixed cash ISA now secures today’s rate before any autumn cuts, and cooling pay data makes those cuts more likely. If you are weighing whether to keep money in cash or invest it, our guide comparing a cash ISA versus a stocks and shares ISA walks through the trade-off. Source: Moneyfacts weekly savings roundup.

Government borrowing fell by a third in June, but debt stayed near record levels

Public sector net borrowing was £16.0 billion in June 2026, down £7.9 billion, or 33.1%, on June 2025 and slightly below the Office for Budget Responsibility’s forecast, helped mainly by lower inflation-linked debt interest costs. The relief is real but partial: net debt still stood at 94.9% of GDP, a level the ONS notes was last seen in the early 1960s. For households the read-across is the autumn Budget. Lower borrowing eases the pressure for fresh tax rises, but with debt this high the Chancellor has little slack, so allowances such as the frozen personal and dividend thresholds are unlikely to loosen. Using this year’s full ISA allowance remains the simplest way to shelter savings and investments from tax, as covered in our ISA allowance guide for 2026. Source: ONS public sector finances, June 2026.