Majority think basic savings rate doesn’t go far enough

Almost six in ten (59 per cent) of savers do not think that a basic savings rate will go far enough.

The idea of a minimum savings rate threshold was first mooted by the Financial Conduct Authority (FCA) in July, yet according to a new survey by Ford Money, savers aren’t confined that it is a good idea.

In fact, 67 per cent of those surveyed said that they were worried that if banks were able to set the minimum savings rate themselves, it would likely be too low to make any difference. A further 78 per cent of savers said that they believed the banks were using customer loyalty against them by refusing to raise rates.

The savings industry needs a shakeup and to do its part to recognise loyal savers,” said Suzanne Lewsley, chief deposits officer at Ford Money. “It shouldn’t rest solely on regulator interventions for the industry or savers to act with their feet to acknowledge and reward long-time customers with fair rates.”

Earlier this year, Citizens Advice lodged a ‘super complaint’ with the Competitions and Markets Authority (CMA), claiming that savers are effectively being punished for their loyalty when banks offer better rates to new customers.

Almost half (46 per cent) of those surveyed by Ford Money said that banks should pay new and existing customers the same rate of interest. A third (32 per cent) said that they think the FCA should have “some control” over the difference in rates. And 45 per cent said that the basic savings rate should mirror the Bank of England’s base rate, which is currently 0.75 per cent.

More than half of those surveyed said that they had held their main savings account for more than five years, while 27 per cent said that they had ever switched to a new savings provider.

Kathryn Gaw

Kathryn Gaw is a financial journalist based in Belfast, Northern Ireland. She has been writing about personal finance and investment trends for more than a decade, and her work has been featured in the Financial Times, City A.M., the Press Association, and The Irish Independent, among many other publications.