Major UK banks like Barclays, HSBC, Lloyds, NatWest, and Santander are offering significantly lower interest rates on easy-access savings accounts compared to the market average. This comes despite these banks reporting substantial profits in recent years.
Barclays, HSBC, Lloyds, NatWest and Santander pay an average rate of 1.42% between them on easy-access accountsThe UK’s biggest banks have cut rates on their flexible savings accounts, offering typically 1.5 per cent less than the market average despite making bumper profits.
Most banks reserve their best rates for fixed accounts where savers must lock their money away for set periods of time. Rachel Springall, finance expert at Moneyfacts, said it would be “disheartening” for savers to find the biggest banks had cut rates on their most flexible savings accounts, resulting in a further drop in their market positions.
In response, bank bosses argued that attempts were made to encourage savers to look at all the available deals. Should interest rates go down, as expected, fixed rates can be a good option if people can afford to lock their money away as they will offer a better return for longer. “However, the big banks moved like Usain Bolt when it came to increasing their mortgage rates but like a tortoise when it came to improving savings rates.”The government will be concerned that a failure to pass on interest rates will impact on its key performance indicator for this Parliament – which is to make voters feel better off with more money in the pocket.
“Regularly reviewing and switching pots is essential when interest rates change, particularly when base rate cuts flow into the savings market.”
SAVINGS RATES BANKS PROFITS INTEREST RATES MARKET AVERAGE
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