Financial watchdog to discuss savings rates concerns with bank chiefs
Bank chiefs are meeting Financial Conduct Authority (FCA) officials on Thursday to discuss concerns surrounding interest rates for savers lagging behind the cost of mortgages.
Bosses from HSBC, NatWest, Lloyds and Barclays are expected to attend.
According to data from Moneyfactscompare.co.uk, the average easy access savings rate on offer on Wednesday was 2.48%.
Average two- and five-year fixed-rate mortgage rates recently broke through the 6% mark for the first time this year, having previously been above 6% during the market volatility that followed last autumn’s mini-budget.
The Bank of England base rate is currently 5%, having increased 13 times in a row as the Bank tries to subdue stubbornly high inflation.
The Treasury Committee has been pressing banks to address concerns about the savings rates being paid.
Dame Andrea Leadsom, a former Cabinet minister who sits on the committee, recently said: “It’s quite clear they have failed to pass on the rise in interest rates to savers.”
Colleague Dame Angela Eagle said previously: “This blatant profiteering has been shocking, and it’s clear to me this behaviour is miles away from the incoming requirement for firms to treat their customers fairly and with respect.”
Providers have been making announcements about increases to their rates in recent days.
For example, Coventry Building Society unveiled a one-year fixed-rate Isa at 5.30% and a two-year fixed-rate Isa at 5.40% on Wednesday, which top Moneyfactscompare.co.uk’s “best buy” tables.
The Coventry said it continually reviews its savings range and tries to make interest rate decisions “as quickly as possible”.
Nationwide Building Society also announced some new savings deals on Wednesday, including the launch of a one-year fixed-rate Isa and one-year fixed-rate bonds paying 5.10%.
Last week, HSBC UK and First Direct also unveiled plans to boost savings rates.
From the end of July, a new consumer duty will be introduced by the FCA, to force financial firms to put consumers at the heart of what they do.
The new duty sets higher and clearer standards of consumer protection across financial services, and requires firms to put their customers’ needs first.
Asked previously whether the banks’ behaviour amounts to profiteering, Prime Minister Rishi Sunak’s official spokesman said: “It’s something the regulator is looking into.”