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Regulator to investigate savings market

Regulator to investigate savings market

Category: Savings

Updated: 10/09/2013
First Published: 10/09/2013

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The Financial Conduct Authority (FCA) has announced plans to investigate the UK's cash savings market.

The savings review will look at a range of issues, including the effects of introductory bonus rates that are offered to new customers on some savings products, which the FCA calls 'teaser rates', as well as analysing how often customers switch their savings accounts.

The UK's savings market is worth £1 trillion. The regulator said the study will form part of the next stage of its review into the financial services industry.

It said its intention is to assess what it can do to ensure savings providers offer customers the best returns possible and provide information that adequately meets their needs.

"Promoting effective competition and ensuring that markets work well for consumers is a key objective for the FCA," said chief executive Martin Wheatley.

"We will be undertaking a programme of work and research that will enable us to have a better understanding of how the markets are working and the dynamics that drive both them and the decisions that consumers make.

"In looking at cash savings, we will examine an area that affects most people and see if there is action we need to take.

"We know that switching rates are low for financial services products and savings accounts are no exception. Even when people do switch their accounts, they are twice as likely to go with their existing provider than move to the offering of a competitor."

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