Since December, the Bank of England has increased base rates in five successive meetings, from 0.1 percent to 1.25 percent. In return, the major high street banks have sat on their hands. Savers must act now as they could get a far better return on their money.
Barclays is the worst offender. Its Everyday Saver account is still paying a vanishingly small 0.01 percent.
Fellow high street giants HSBC, Lloyds and NatWest are only slightly better.
It’s outrageous, but the banks don’t seem to care about treating customers fairly or reputational harm.
We have been here before. Remember how the country shook with collective fury after our banks triggered the financial crisis in 2008?
Hard-pressed taxpayers bailed them out to the tune of £137 billion, only to watch in despair as bankers continued to lavish senior staff with juicy bonuses.
As the cost of living crisis intensifies, banks should be repaying an old favour by bailing out struggling customers.
Instead, they have abandoned them.
I contacted Barclays to ask how it could justify paying such a dismal rate. The bank’s spokesperson claimed the Everyday Saver isn’t so bad.
Customers who save more than £50,000 get a higher rate of 0.10 per cent.
Amazing.
Some Barclays accounts do offer a better return. The Barclays Instant Cash Isa pays 0.3 percent, while Blue Rewards Saver pays a dizzying 1 percent.
The spokesperson added: “We regularly review our savings product rates and proactively communicate to customers to make them aware of the best savings rates available.”
One thing is certain, the best savings rates are not available from Barclays.
I also contacted HSBC, which said that it has increased rates on its Flexible Savings and Premier Savings accounts from 0.01 percent in February to 0.20 percent today.
It’s not much to shout about, but at least its Online Bonus Saver pays up to 1.30 percent, up from 0.05 percent before March 1.
Rates on the Lloyds Easy Saver have climbed from 0.01 per cent to 0.20 percent, while the NatWest Instant Saver will pay 0.20 percent from August 1.
In banking, loyalty does not pay. By shopping around you can get 1.5 percent on easy access, and 3 percent with a fixed-rate bond.
READ MORE: Yorkshire Building Society launches accounts with 5% rate
Aldermore pays 3 percent, fixed for two years. If you saved £20,000 with them, you would get £600 in a year. That compares to just £2 from Barclays.
Halifax is another offender, says Anna Bowes, founder of SavingsChampion.co.uk. “Once popular accounts with promising names such as Liquid Gold, Saver Reward and Bonus Gold all pay just 0.05 percent.”
The high street banks are quick to pass on base rate cuts but drag their feet when rates rise, she adds.
Markets expects the Bank of England to hike rates by at least 0.5 percent at its next meeting in August, lifting them to 1.75 percent but Bowes cautioned: “It’ll be interesting to see how the high street banks respond. My suspicion is that sadly they’ll do very little.”
She’s almost certainly right. Shaming the banks won’t work. All you can do is abandon them, like they’ve abandoned you.
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