The UK’s biggest banks are continuing to offer easy access savings rates well below the average despite consumer duty obligations, data from Moneyfacts has revealed.
The data revealed that the UK’s big banks, such as Barclays, HSBC, Lloyds Bank, Natwest, and Santander, all pay less than 2 per cent on their most accessible no-notice accounts.
This is even though over 80 per cent of the market, or 292 of 364 products, currently pay 2 per cent on a higher £10,000 balance.
These selected accounts pay an average of 1.69 per cent interest between them, “significantly” less than the market average across all available easy access accounts at the moment.
Moneyfacts spokesperson, James Hyde, explained that consumer duty regulations regarding existing products have been in effect since July 31 2023.
He stated that this means companies have had almost a year now to review any previously uncompetitive products, and bring them into compliance with the rules laid out by the Financial Conduct Authority.
“Unfortunately, the big five banks are still paying significantly sub-par variable savings rates,” he added.
“Their most accessible no-notice accounts all offer less than 2 per cent interest per annum - putting them all in the bottom fifth of the market.”
Hyde additionally explained that currently, a saver who puts £10,000 in an easy access Isa offered by a big bank would lose out on £169 in interest each year, compared to the market average rate paid, or £344 on a market leading account.
“Rules regarding closed accounts come into effect this summer, so it remains to be seen if there is more urgency to improve rates going forward.
“As always, customers are encouraged to proactively monitor savings rates, particularly if they’re on a variable rate which providers can adjust on a very reactive basis.
“People should be prepared to switch if they feel their loyalty is not being adequately rewarded.”
tom.dunstan@ft.com
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