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Savers have been urged to "vote with their feet" in the hunt for the best savings accounts after it was revealed that many providers failed to pass last year's rise in the base rate on to their customers.
According to the latest yet-to-be published Moneyfacts UK Savings Trends Treasury Report, the number of accounts paying over base rate has dropped by 77 since the rate rose to 0.50% in November 2017, with 1,297 accounts now paying above this level
This means that at present, 72% of all savings accounts offer a return in excess of the base rate of interest, 5% fewer than in November last year. Even more significantly, this is 4% lower than a month after the last rate cut in August 2016. In addition, the average return available on an easy access account is yet to return to its pre-cut levels, and currently stands at 0.49%, compared with 0.54% in August 2016.
"This indicates that, while base rate has returned to 0.50%, the savings market has yet to recover from the rate cut almost two years ago," said Charlotte Nelson, finance expert at moneyfacts.co.uk. "These latest figures clearly show that some providers either didn't pass on the rate rise in November, or only increased rates by such a small amount that it had little effect. With the main banks still not requiring savers' funds, it is unlikely that this is going to change anytime soon."
On a more positive note, the average returns available on fixed rate bonds have increased for the third month running to reach their highest levels in two years.
"This is predominantly fuelled by challenger banks boosting competition, yet it'll be little consolation to those who want easy access to their cash," adds Charlotte. "Not only will savers have had their hopes dashed as a base rate rise this month was not meant to be, but the news that the last rise failed to result in better rates for most will be an added thorn in their side.
"Savers will now have to take matters into their own hands and revaluate their accounts to make sure they are not on a rate that pays less than the base rate. If they are, voting with their feet is their only option."
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