Treasury Committee expands savings rates campaign with letters to Nationwide, Santander, TSB and Virgin Money
10 May 2023
The Treasury Committee today widens its campaign for banks to increase the savings rates offered to loyal customers.
- Letter to Nationwide
- Letter to Santander
- Letter to TSB
- Letter to Virgin Money
- Inquiry: Retail Banks
- Treasury Committee
In new correspondence, the cross-party Committee of MPs questions Nationwide, Santander, TSB and Virgin Money on their easy access savings accounts.
The Committee asks why savings rates are much lower than the current interest rate, how the banks and building societies determine the level of interest rate increases to pass on to savers, and whether they inform their loyal customers that higher alternatives may be available.
Collectively, these banks and building societies, defined as ‘scale challengers’, account for a quarter of all personal current accounts, according to the Financial Conduct Authority (FCA).
The correspondence follows results announcements from the ‘big four’ banks - Barclays UK, HSBC UK, Lloyds Banking Group and NatWest Group - all of whom reported strong growth in net profits.
When the Committee began its inquiry into retail banks in February, the big four banks offered between 0.5 and 0.65 per cent easy access savings rates. Today, the big four offer rates between 0.7 and 1.3 per cent. The Bank of England interest rate is currently 4.25 per cent.
Chair's comment
Commenting on the correspondence, Harriett Baldwin MP, Chair of the Treasury Committee, said:
“Recent results announcements show that the UK’s biggest banks are continuing to squeeze record profits from their loyal savers. In a high interest rate environment, and with further Bank of England base rate rises possible, banks must do more to encourage saving.
“As a Committee, we would like to know why savings rates offered by banks and building societies are so much lower than the current base rate, and whether banks tell their loyal customers better deals could be available. We are concerned that the loyalty penalty may be particularly severe for elderly or vulnerable customers who may not be able to take advantage of higher rates available online.
“Consumers should continue to vote with their feet and find better offerings. This, more than anything, will drive the banks to increase their currently measly rates.”
Rates offered by the ‘scale challenger’ banks
|
|
Rate available today (10 May) |
|
Virgin Money everyday saver |
0.25% |
|
Santander everyday saver |
0.7% |
|
TSB easy saver |
0.9% |
|
Nationwide instant access saver |
1.25% (up to £10,000) |
Rates offered by the ‘big four’ banks
|
|
Rate available today (10 May) |
|
Barclays everyday saver |
0.7% |
|
Lloyds Bank easy saver account |
0.85% (up to £25,000) |
|
NatWest flexible saver |
1.0% (up to £25,000) |
|
HSBC flexible saver |
1.3% |
Last month, the Financial Conduct Authority (FCA) revealed to the Committee that the harm to loyal customers earning low savings rates was likely to have increased as interest rates have risen.
The Committee has been questioning the ‘top four’ retail banks on their easy access savings rates. Responses from Barclays UK, HSBC UK, Lloyds Banking Group and NatWest Group can be read in full here.
Further information:
- The Committee held an evidence session with the chief executives of Barclays UK, HSBC UK, Lloyds Banking Group and NatWest Group on 7 February. Further information about the session, a video replay and a transcript can be found here.
Further information
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