Sheldon Mills, the FCA’s executive director, said: “We want a competitive cash savings market that delivers better deals for savers, where interest rates are reviewed quickly following base rate changes and firms prompt savers to switch to accounts paying higher rates. We welcome the progress that has been made so far but this needs to speed up.” In light of this, how much interest are the UK’s banks offering to customers?
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NewsTranscript
00:00 The Financial Conduct Authority has criticised high street banks, including Lloyds, NatWest,
00:04 Barclays and HSBC, for not passing on higher interest rates to its customers and the UK's
00:10 top banks have been warned that they will need to justify their reasoning for this after
00:14 it was found some savings accounts still remain below 2%.
00:18 A 14-point plan has now been introduced by the FCA in order to push banks to improve
00:22 their savings interest rates.
00:24 Those banks with the lowest savings rates will have to justify this by the end of August,
00:29 with those failing to do so facing action, including fines.
00:32 Analysis by the Watchdog found that nine of the biggest banks in the country only passed
00:37 on around 28% of interest rate rises to easy access savings accounts from January 2022
00:44 to May 2023.
00:46 This meant that while the Bank of England interest rate rose from 0.25% to 4.5%, interest
00:53 rates on these accounts rose on average from 0.07% to only 1.25%.