Where’s our booster? Ten days after the BoE rate rise… and STILL high street banks are refusing to give savers a better deal
- The Bank of England hiked the base rate from 0.1% to 0.25% ten days ago
- But banks have so far refused to hike savings rates for customers
- Many banks are paying just 10p annual interest for every £1,000 saved
The country’s major high street banks are resolutely refusing to hand out any yuletide cheer to their beleaguered savers.
Despite the Bank of England pushing up base rate from 0.1 to 0.25 per cent ten days ago, not one of the big banks has yet to commit to giving savers a better deal.
It means millions of bank savers continue to receive a derisory 0.01 per cent of annual interest on their money in instant access savings accounts and cash Isas – 10p for every £1,000 saved.
No rate rise for customers: The UK’s high street banks are so far refusing to play ball
Seven days ago, The Mail on Sunday launched its ‘Give Savers A Rate Rise’ campaign, aimed at encouraging the banks to treat their savers better after years of neglect.
We believe any savings rate rises should be backdated to December 16 when base rate was pushed up.
We also feel that any increases should at least match the 0.15 percentage rate uplift in base rate, although it could be argued this would not be enough.
It would mean that the rate on most mainstream instant access savings accounts and cash Isas would rise to 0.16 per cent – still a miserly £1.60 on every £1,000 saved.
Our four demands
1. Give full 0.15 per cent boost to ALL savers
2. Backdate extra interest to December 16
3. Notify savers of changes in writing
4. Tell savers of any better deals on offer
But the banks are so far refusing to play ball, putting profits above treating customers fairly – a duty required of them by the Financial Conduct Authority, the City regulator.
The FCA has attempted in the past to help savers get better rates for cash savings, but its initiatives have so far failed to have any positive impact.
In the wake of the base rate rise, we asked all the major banks whether they intended to increase savings rates on accounts where income payments are at the whim of the provider – not fixed or linked to base rate.
None of them offered their savers a ray of hope with only Lloyds Bank – owner of savings brands Halifax, Birmingham Midshires and Bank of Scotland – providing a glimpse into its thinking.
It said any interest rate changes would come in from February next year, more than six weeks after the increase in base rate.
Unimpressed, The Mail on Sunday went back again to the big banks on Christmas Eve to see whether they had made any progress on setting new savings rates – especially in light of the fact that savings giant NS&I is pushing up interest rates by 0.25 percentage points (Direct Isa) and 0.2 percentage points (Direct Saver and Income Bonds).
Their responses – or lack of them – are shown below. The tardiness shown by the banks is annoying both readers and savings experts.
Many banks are paying just 10p annual interest for every £1,000 saved
A shameful lack of interest in savers… week 2
We don’t have any update for you. (Pays 0.01 per cent on Instant Saver and Cash Isa)
There is no change to our position. Interest rates on our savings accounts are not directly linked to the Bank of England base rate so there is no immediate or automatic increase in interest rate.
However, a review will be carried out on our accounts after a change to the base rate and if there are any changes to interest rates, we will notify customers directly. (Pays 0.01 per cent on Flexible Saver)
Nationwide Building Society
Nothing new to add. We are currently considering what impact the announcement will have more broadly for borrowers and savers and will announce further details in due course. (Pays 0.01 per cent on Instant Isa Saver – on balances up to £9,999)
No [update]. Any future changes to Santander’s wider range of variable rate banking and savings products will be communicated to customers. (Pays 0.01 per cent on Everyday Saver and Easy Isa)
We’ll let you know as soon as we have an update. (Pays 0.01 per cent on Everyday Saver)
There is no update on what we said this time last week. We’re considering what the base rate increase will mean for our savings customers – and any changes will come into effect on February 1. (Pays 0.01 per cent on Easy Saver, Cash Isa Saver, Halifax Everyday Saver and Halifax Isa Saver Variable)
Andrew Hagger, a personal finance expert at Moneycomms.co.uk, is among them.
He says: ‘The big banks don’t deserve to have any money sitting in their savings accounts, paying an insulting 0.01 per cent.’
He adds: ‘Between them, the big banks and building societies spend a small fortune on TV advertising telling us they are there for us.
‘But it all sounds hollow when you look at the measly returns on offer to loyal savers.’ Hagger says it is now time that mainstream savings providers were required to link rate changes on cash Isas and instant access savings accounts to base rate.
So, when base rate rises by 0.15 percentage points, savings rates would increase by the same amount.
Peter Bradbourne, a retired managing director of a drainage company from Wetherby in West Yorkshire, accuses the banks of acting ‘disgracefully’. Peter – in his 70s, married and retired for seven years – says it is a ‘bad time for savers in retirement’.
He adds: ‘Bankers seem to think that because a cash Isa is tax-free, it should be almost interest-free for savers.’
Anna Bowes, co-founder of rate scrutineer Savings Champion, say: ‘Surely the high street banks should provide a glimmer of hope to their savers that they will be looked after and rewarded for their loyalty.
‘Unfortunately, after more than a week since the Bank of England’s base rate announcement, their silence is deafening.’
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