Savings warning as bank customers 'short-changed' by sub-2% interest rates
Savers are being "short-changed", according to experts
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Experts are urging Britons to take action as savers are being "short-changed" on the interest rates provided by easy access accounts from banks.
Savings products have been awarded hikes to account rates following recent action the Bank of England.
The central bank's Monetary Policy Committee (MPC) has raised the base rate to 5.25 per cent in its fight against inflation.
One of the benefits of this has been that savings rates have risen substantially in recent years.
However, new analysis from Moneyfacts has determined that the average closed easy access rate is lower than the live equivalent over the last two years.
The difference between the average closed rate and live rate on easy access accounts has widened from 0.08 per cent in July 2022 to 0.31 per cent in July 2024.
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Savers are looking for the best deal from banks and building societies to make their money go further
GETTYHere is a full list of the savings interest rates currently on offer from the major high street banks:
- Barclays Bank - Everyday Saver - 1.65 per cent interest rate
- HSBC - Flexible Saver - 1.98 per cent interest rate
- Lloyds Bank - Easy Saver - 1.40 per cent interest rate
- NatWest - Flexible Saver - 1.74 per cent interest rate
- Santander - Easy Access Saver - 1.70 per cent interest rate.
Rules set by the Financial Conduct Authority (FCA) for open products and services came into effect in July 2023
In comparison, the duty for closed products and services comes into effect on July 31 2024 which includes easy access savings accounts which are no longer on sale to new customers.
These rules are in place to ensure better consumer protection for customers across the financial services sector.
A recent survey conducted by Moneyhub found 36 per cent of respondents believe Consumer Duty “will drive banks to become more customer-centric institutions".
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UK interest rates have risen following the recent 14 consecutive Bank of England base rate increases GB NEWSRachel Springall, a finance Expert at Moneyfactscompare, explained: "Savers are being short-changed if they don’t proactively review and switch from their closed easy access accounts.
"Over the past two years, the average rate on a live easy access account has surpassed the average closed rate, despite base rate rises from the Bank of England and numerous calls for the biggest banks to improve savings rates for existing customers. Savers must shake any apathy they have to move their pots, otherwise they will be left disappointed when their loyalty is not rewarded.
“As some of the biggest high street banks pay less than two per cent on their most flexible live easy access accounts, some of the top rates on the market overall pay around five per cent.
"Despite using a trusted brand, the convenience of leaving cash in an easy access account can mean missing out on higher interest rates elsewhere, so it is imperative savers ditch and switch to a better return. Building societies and challenger banks continue to work hard to entice new deposits and reward loyal customers so they are worth comparing against the more familiar high street brands. "