As if the continued drop in savings rates wasn't bad enough, our latest research reveals another blow to already hard-pressed savers, with the number of accounts available having fallen to a record low.
The data, taken from the latest Moneyfacts UK Savings Trends report (due to be published later this week), shows that the total number of savings products available has fallen dramatically in recent months, with a staggering 274 accounts being withdrawn from the market since January – and 127 have disappeared in the last two months alone.
It means that availability is at an all-time low – well below the peak of 2,093 accounts available in April 2012 – so not only are savers facing record low rates, but they've got fewer products to choose from than ever before.
"Two months on from the base rate cut, you would hope that the dust had settled by now," said Charlotte Nelson, finance expert at Moneyfacts. "Unfortunately, providers are still withdrawing products at an alarming rate, with the total number of products down by 127 since August. Instead of reducing rates by minuscule amounts and taking the criticism from savers and the media, many institutions are opting to simply remove certain products from the market."
Much of this is down to a clear lack of desire to compete. As Charlotte explains, the continuing downward spiral in rates sees many providers (particularly smaller building societies) creep up the best buy tables, and it's somewhere they simply don't want to be: "Savers sensing a good deal immediately flock to these new best buy rates, but since these smaller providers are unable to cope with the influx in demand, they have no choice but to withdraw the product from the market.
"At a time when the Financial Conduct Authority (FCA) is implementing new policies designed to get savers switching, this reduction in product numbers is concerning. Not only will savers have less choice, but with rates in a constant freefall, it is starting to become a pick of a bad bunch."
The reduction in product numbers combined with ever-falling rates means it's more important than ever to compare the options to make sure your money is working as hard as possible. You may even want to lock in to a fixed rate to avoid the possibility of rate cuts for the foreseeable future, but however you want to play it, check out the top savings accounts while they're still available!
Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.
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