Rate cut on one in ten savings accounts - Savings - News - Moneyfacts


Moneyfacts.co.uk News brings you the latest financial & economic news & reviews of the best products in the UK by our team of money experts.

Rate cut on one in ten savings accounts

Rate cut on one in ten savings accounts

Category: Savings

Updated: 04/11/2009
First Published: 04/11/2009

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

Over one in ten savings accounts have had their rates reduced in the last seven months, despite the Bank of England's base rate remaining static since March.

Research conducted by Moneyfacts.co.uk has revealed that 10.1 per cent of variable rate savings accounts have suffered a rate reduction in what is already a historically uncompetitive market.

In the last month alone, 3.9 per cent of all accounts have been subject to rate cuts. These include:

• Bank of Scotland – Rates reduced by 0.05% and 0.12 per cent
• Clydesdale Bank – Rates reduced by between 0.50 per cent and 0.75 per cent
• Halifax – Rate reduced by 0.05 per cent and 0.12 per cent
• Intelligent Finance – Rates reduced by between 0.26 per cent and 0.36 per cent
• Leeds Building Society – Rates reduced by between 0.10 per cent and 0.25 per cent
• Marsden Building Society – Rates reduced by between 0.10 per cent and 0.45 per cent
• National Counties BS – Direct Access re-tiered and £1 tier reduced by 0.86 per cent
• Yorkshire Bank - Rates reduced by between 0.50 per cent and 0.75 per cent

These cuts mean that almost half of all variable rate accounts on the market pay the base rate 0.5 per cent or less. Furthermore, over one in five (22.8 per cent) pay a paltry rate of 0.10 per cent or less.

"Once again, it is savers and pensioners - groups that rely on income for their savings that find themselves worse off. Savers will be asking how providers can justify cutting rates further, when bank base rate has remained on hold," commented Michelle Slade, spokesperson for Moneyfacts.co.uk.

"From the beginning of November new regulations came into effect from the FSA requiring providers to give two months notice ahead of disadvantageous interest rate changes. It appears that a number of providers have pre-empted these changes and reduced rates before the new rules came into force."

In the seven months since the last base rate alteration, just 3.5 per cent of accounts have benefitted from rate increases.

"Savers need to ensure they regularly review the rate they are receiving and switch accounts if the rate payable is no longer competitive," Ms Slade added.

Find the best savings account for you - compare savings accounts

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.

Related Articles

Just 44 savings accounts beat inflation

Inflation recorded another large jump during December, and predictably, this has had a devastating impact on the number of savings accounts that beat it, so much so that you’ll need to lock your money away if you want an inflation-beating return.

Just 47% have money in a savings account

We’re often told of the importance of saving, yet unfortunately, the message doesn’t always get through. Indeed, research shows that just 47% of those surveyed have money in a savings account, and 17% have no savings or investment whatsoever.

How much will you save this year?

Many of us have set savings goals for the year ahead, and planning to budget better and save more will be at the top of many financial resolution lists. But how much are you hoping to squirrel away? Encouragingly, many people have impressive targets.