The UK’s biggest banks are “failing” to pass on recent hikes to interest rates to savers, according to new research.
A report by Moneyfactscompare is highlighting the lack of competitive interest earned on easy access savings account offered by Barclays, HSBC, Lloyds, NatWest and Santander.
This is despite continued calls from the Financial Conduct Authority (FCA) around Consumer Duty to ensure savers are getting the best value.
Lloyds, Barclays and other top banks’ flexible easy access products remain in the bottom quartiles and pay interest rates of less than two per cent.
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Big banks are under fire for their easy access account offerings
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According to Moneyfactcscompare, the average easy access savings account pays a rate of 3.17 per cent based on £10,000 gross.
In November, all of the top five banks in the country offered a fixed rate bond in the top quartile of the market.
However, Moneyfactscompare reports that Barclays is the only bank of the group to continue to offer an interest rate in the top 25 per cent.
Currently, Barclays’ one-year fixed rate bond pays an interest rate of 4.65 per cent and sits in the top quartile.
In comparison, fixed rate bonds from Lloyds, HSBC, NatWest and Santander have fallen into the second quartile and have interest rates sitting between 4.05 and 4.35 per cent.
Here is a full list of the easy access selection from the country’s five biggest banks, according to Moneyfactcscompare:
- Barclays – Everyday Saver account – 1.65 per cent interest rate
- HSBC – Flexible Saver account – 1.98 per cent interest rate
- Lloyds Bank – Easy Saver account – 1.40 per cent
- NatWest – Flexible Saver account – 1.74 per cent
- Santander – Easy Access Saver account – 1.70 per cent.
James Hyde, the spokesperson at Moneyfacts, warned that the big give banks “are still yet to make” their easy access products more competitive compared to the rest of the market.
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The Bank of England base rate is at a 15-year high of 5.25 per cent GB NEWSHe explained: “The Financial Conduct Authority’s regulations around Consumer Duty directed financial services institutions to offer fair value, and the big banks are still failing in some areas to meet those expectations.
“With new rules regarding closed accounts coming into effect this summer, it remains to be seen if there is more urgency to improve rates going forward.
GB News has contacted Barclays and Lloyds Bank for comment. A NatWest spokesperson said: “We offer a range of savings accounts to meet the needs of our customers.
“Including a Digital Regular Saver account with a six per cent interest rate designed to help new savers build a savings habit by saving little and often through to competitive fixed term deposits rewarding customers with a higher interest rate.”
A Santander spokesperson said: “Santander regularly reviews product rates in light of changing market conditions. We have a range of savings accounts to deliver value for our customers, including our easy access Edge Saver which offers seven per cent interest.”
A HSBC UK spokesperson told GB News : “We continue to support customers and provide overall value on our savings accounts that goes beyond interest rates to include convenience, simplicity, and organisational and financial stability of the bank.
“We have designed our savings accounts to make it easy to build and maintain a savings habit, and we know that rates are important to customers alongside flexibility, convenience and confidence of saving with a trusted high street brand.”
Furthermore, HBSC’s Online Bonus Saver pays two per cent on balances up to £50k, which increases to four per cent in months where no withdrawals are made on the account.