Loyal savers are missing out on billions of pounds in the interest of sticking with the top of the street banking giants.
As of July, all major suppliers pay a miser of 0.01% interest for customers with easy access deals. The savings rate has dropped to record levels since the Bank of England’s base rate fell 0.1% in March.
Experts warn that customers with large providers like Halifax, NatWest and HSBC – are suffering from the worst of rate cuts.
Rate cuts: starting next month, all major providers pay a miserly 0.01% interest for customers with popular, easy to access, special offers
Money has flowed into these banks in the past few months as families are desperately trying to save their cash during the pandemic.
Overall, the largest of the nine providers to hold £ 687 billion in their easy-to-access accounts – more than two-thirds of money savers.
It is estimated that savers are missing out on up to £ 6.8 billion a year in interest, but could earn up to 100 times more interest from elsewhere.
Savers earn only € 1 in interest on a £ 10,000 pot with the big banks. With inflation at 0.5%, they need € 50 just to keep the power to spend their money intact.
National Savings and Direct Investing Watch has the best interest rate of 1% or € 100 on each of £ 10,000.
If the big banks paid savers 1%, they would need to shell out an additional £ 6.8 billion in interest on money held in easy access accounts.
But they don’t need to attract cash savers because they can borrow from the Bank of England at low rates.
The results come from the Bank of England, figures showed that households recorded £ 16.2 billion in April – three times the type of £ 5 billion a month they set aside in the six months of February.
Despite job losses and wage cuts, major expenses such as vacations, travel and entertainment expenses have disappeared due to the social-remoteness of household remission restrictions the ability to set aside money in a time of uncertainty.
Justin Modray, director of Franche Conseils Financiers, explains: “This is a terrible blow for savers, and yet another example of banks showing little regard for their loyal customers.
It is well worth checking the rate of return on your savings and switching to earn some interest if necessary. “
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