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- By Kevin Peachey
- Cost of living correspondent
Image source, Getty Images
Big banks are doing “as little as they can get away with” when setting higher savings rates for loyal customers, an influential group of MPs has said.
The Treasury Committee has been scathing of the returns being offered to savers by the major High Street banks as interest rates have risen.
It has called on customers to shop around for better deals.
New Bank of England figures suggest people have been shifting their savings to get better interest rates.
‘Too slow’
The Treasury Committee has consistently raised concerns about whether the rising Bank of England benchmark interest rate is being passed on in full to savers.
In response. Harriett Baldwin, who chairs the Treasury Committee, said: “The big four banks have been far too slow to reward savers through better rates on instant access savings accounts.
“The figures published in the past week still show signs that the banks are trying to do as little as they can get away with to reward our constituents for saving. We will continue to press for individual and business savers to be rewarded. Meanwhile, savers should shop around for the best rate.”
The data showed that £7.7bn was deposited into Treasury-owned National Savings and Investments (NS&I) in September, the most in a single month for three years, and up sharply from the £300m deposited in August.
NS&I was offering a market-leading fixed deal at the time, which required savers to lock away their savings.
This type of account, offered across various providers, currently has an average interest rate of 5.21%, compared with a 1.96% average return on easy-access accounts.
Alice Haine, personal finance analyst at investment platform Bestinvest, said: “The era of cheap money is well and truly over, so households should prioritise clearing expensive unsecured debt and building up a rainy day pot to withstand any unexpected expenses.
“Those fortunate enough to have spare money to save should move fast, as the top deals get snapped up quickly.”
In response to criticism, bank bosses have argued that attempts have been made to encourage savers to look at all the available deals.
What are my savings options?
- As a saver, you can shop around for the best account for you
- Loyalty often doesn’t pay, because old savings accounts have among the worst interest rates
- Savings products are offered by a range of providers, not just the big banks. The best deal is not the same for everyone – it depends on your circumstances
- Higher interest rates are offered if you lock your money away for longer, but that will not suit everyone’s lifestyle
- Charities say it is important to try to keep some savings, however tight your budget, to help cover any unexpected costs
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