British savers are receiving a poor deal from banks, according to the Financial Conduct Authority (FCA). Its analysis of the £700bn total savings market revealed that around £160bn in deposits are earning equal to or less than the Bank of England base rate of 0.5%. The FCA found that 80% of easy access accounts have not been switched in the last three years, with many put off by the expected inconvenience.
In response, the FCA will ask providers to be more transparent about how reductions in interest rates on variable rate savings accounts are applied. This includes prominently displaying the lowest rate of interest any of their customers receives. It also wants to make it easier to provide a way for consumers to view and manage accounts with different providers in one place, and make the switching process as easy as possible.
Christopher Woolard, director of strategy and competition at the FCA, said: “We want to see firms making simple information much easier to find. More also needs to be done to reduce the hassle for consumers to switch their savings. The steps we have proposed today are designed to make the market more dynamic, working in everyone’s interest.”
Which? executive director, Richard Lloyd, said: “For too long, banks and building societies have left customers trapped in savings accounts paying woefully low interest rates and losing out on billions. More than 50,000 people supported our campaign to get people a better deal on their savings and we now expect to see the industry working with the regulator to make these recommendations a reality as soon as possible. The banks must quickly start playing fair and help consumers get a good deal.”
According to the FCA, British savers are receiving a poor deal from banks, with around £160bn in deposits earning equal to or less than the Bank of England base rate of 0.5%. The regulator has found that 80% of easy access accounts have not been switched in the last three years, with many put off by the expected inconvenience.
In response, the FCA will ask providers to be more transparent about how reductions in interest rates on variable rate savings accounts are applied, and to display prominently the lowest rate of interest any of their customers receives. It also wants to make it easier to provide a way for consumers to view and manage accounts with different providers in one place, and reduce the hassle for consumers to switch their savings.
Which? executive director, Richard Lloyd, said: “For too long, banks and building societies have left customers trapped in savings accounts paying woefully low interest rates and losing out on billions. More than 50,000 people supported our campaign to get people a better deal on their savings and we now expect to see the industry working with the regulator to make these recommendations a reality as soon as possible.”
