The Bank of England has hiked base rates twice in quick succession but the big high street banks continue to pay savers as little as 0.01 percent. Experts are urging savers to find a better deal today.
After the Bank of England increased rates to 0.25 percent in December, Barclays, Lloyds and NatWest, Halifax, Nationwide, Santander, Virgin Money, TSB and others rapidly hiked their mortgage rates.
Yet their savings rates have barely moved, even though the BoE hiked rates again on February 3 to 0.5 percent.
The Lloyds Easy Saver, Barclays Everyday Saver and NatWest Instant Saver deposit accounts continue to pay 0.01 percent.
On Friday, HSBC finally acted, increasing interest rates on all its variable rate savings accounts. The rate on its instant access accounts crept up from 0.01 percent to 0.10 percent.
Yet savers can get dramatically more switching to smaller "challenger banks".
The Express contacted Lloyds to ask when it would pay savers more, which only said that its "savings rates remain under review”. Barclays is also said it is reviewing rates, but pointed out that it increased the return on its Blue Rewards Saver by 0.1 percent to 0.25 percent, after the December BoE hike.
Barclays also increased rates on its instant cash Isa, which now pays 0.05 percent on balances below £30,000.
NatWest is reviewing its savings rates, too, and added: “Our Digital Regular Saver offers one of the highest rates in the market at 3 percent to encourage the savings habit.”
Among the bigger names, only Tesco Bank stands out for passing on the full December 0.15 percent base rate increase, said Anna Bowes, founder of SavingsChampion.co.uk. “Most of the others to increase rates were building societies, including Skipton, Principality, Newcastle, Suffolk, Stafford Railway, Bath, Swansea, Bucks and Yorkshire.”
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Bowes called the failure to hike rates is “outright daylight robbery” and urged savers to move their money from the big banks. “They pay the worst rates and that’s unlikely to change. Choose a provider who is willing to woo you.”
James Daley, managing director of Fairer Finance, which campaigns for better financial services, says “sadly this kind of chicanery has been commonplace for years”.
Banks are slow to pass on rising rates to savers, but quick to pass the extra cost onto borrowers, he said.
Daley said it’s particularly galling for savers who have been "paid a pittance for more than a decade".
Sarah Coles, personal finance analyst at Hargreaves Lansdown, said this “stubborn refusal to budge on savings rates feels like an insult to savers who have waited more than a decade for better deals”.
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Instead of 0.01 percent, you can get 70 times as much from “challenger" bank Cynergy, which pays a variable 0.71 percent with instant access, Coles said. This is boosted by a temporary 0.41 percent bonus that lasts 12 months.
Another challenger bank, Aldermore, pays a variable 0.70 percent, with 120-days notice to get your money.
If you can lock your money away for five years you can get 2.20 percent from Monument Bank and 2.10 percent via savings platform Raisin, but Coles said. “That is still well below today’s 5.4 percent inflation rate.”
The big banks do not deserve your loyalty, said Andrew Hagger, savings expert at MoneyComms.co.uk. “Despite getting taxpayer assistance when they needed it, they still continue to serve up poor savings deals.”
Hagger urged savers to vote with their feet and check out some of the more competitive challengers such as Shawbrook, Aldermore, Castle Trust, Paragon Bank, and Charter Savings Bank.
“They are always featuring in or close to the best buy rates and your first £85,000 is protected under the Financial Services Compensation Scheme in exactly the same way.”
Ultimately, the banks rely on your apathy, Hagger said. “Until customers start to switch in their droves, nothing will change.”
https://news.google.com/__i/rss/rd/articles/CBMijgFodHRwczovL3d3dy5leHByZXNzLmNvLnVrL2ZpbmFuY2UvcGVyc29uYWxmaW5hbmNlLzE1NjUwMTUvc2F2ZXJzLWJhbmtzLWJpZy1iYW5rcy1oaWdoLXN0cmVldC1iYW5rcy1CYXJjbGF5cy1MbG95ZHMtTmF0V2VzdC1IU0JDLWludGVyZXN0LXJhdGVz0gEA?oc=5
2022-02-13 08:00:00Z
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