Treasury Committee accuses UK’s biggest banks of ‘blatant profiteering’

Home News Savings Treasury Committee accuses UKs biggest banks of blatant profiteering

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Ella Mower

Senior Content Writer

Published: 04/07/2023

Barclays, HSBC UK, Lloyds Banking Group and NatWest Group under fire again over below average savings rates.

Scrutiny of some of the UK’s biggest banks intensified yesterday, with the Treasury Committee sending out another round of letters as part of its campaign to improve savings rates. Barclays, HSBC UK, Lloyds Banking Group and NatWest Group received renewed criticism for continuing to offer easy access rates significantly below the Bank of England base rate.

‘Blatant profiteering’ is how Dame Angela Eagle MP, member of the Treasury Committee, described the banks’ below average savings rates.

With the Consumer Duty coming into effect on 31 July, Eagle went on to say that “this behaviour is miles away from the incoming requirement for firms to treat their customers fairly and with respect.”

Will the Consumer Duty see rates rise?

As mentioned, this latest communication comes as the Financial Conduct Authority (FCA) is set to introduce the Consumer Duty at the end of the month. Part of the Consumer Duty requires providers to explain and justify pricing decisions, and be able to demonstrate how their rates offer fair value to customers.

Letters to Barclays, HSBC UK, Lloyds Banking Group and NatWest Group ask the providers to explain how the Consumer Duty will change the way their rates are set and how they interact with their customers.

Some of the questions include whether the providers are confident their current products are consistent with the upcoming Consumer Duty and whether existing customers are receiving competitive rates in line with changes to the base rate.

How the rates compare

Currently, the ‘big four’ offer easy access rates between 0.90% AER and 1.75% AER on balances below £25,000 – lower than today’s average easy access rate of 2.45% gross, according to Moneyfacts’ data. This is despite the Bank of England raising the base rate to 5.00% in June.

Provider	Account Name	Rate	Balance
Barclays	Everyday Saver	1.00% AER	Minimum £1
HSBC UK	Flexible Saver	1.75% AER	Minimum £1
Lloyds Bank	Easy Saver	0.90% AER	0.90% AER paid at £1, 1.15% AER at £25K, 1.50% AER at £100K
NatWest	Flexible Saver	1.11% AER	1.11% AER paid at £1, 1.76% AER at £25K, 2.32% AER at £100K, 2.89% AER at £250K

What next?

As with previous correspondence from the Treasury Committee, the providers have the opportunity to respond. Barclays, HSBC UK, Lloyds Banking Group and NatWest Group have until 17 July to provide answers to the Committee’s questions. It’s expected that any responses will be made public on the Treasury Committee’s website.

In the meantime, you can find out how your easy access savings rate compares by visiting our charts.

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. Links to third parties on this page are paid for by the third party. You can find out more about the individual products by visiting their site. Moneyfactscompare.co.uk will receive a small payment if you use their services after you click through to their site. All information is subject to change without notice. Please check all terms before making any decisions. This information is intended solely to provide guidance and is not financial advice. Moneyfacts will not be liable for any loss arising from your use or reliance on this information. If you are in any doubt, Moneyfacts recommends you obtain independent financial advice.

Nationwide, Santander, TSB and Virgin Money defend savings rates

Four high street providers, Nationwide, Santander, TSB and Virgin Money, all defended their savings rates in letters published last week. This follows correspondence from the Treasury Committee in May which criticised the banks and building societies for seemingly failing to pass increases to the Bank of England base rate on to savers.

Their responses cite current accounts and fixed products as higher-rate alternatives.

More banks criticised over poor savings rates: How does yours compare?

Four more well-known banks have been scrutinised by Parliament for not rewarding loyal customers. Nationwide, Santander, TSB and Virgin Money are the latest banks and building societies to come under fire from the Treasury Committee for offering savings rates significantly below the current interest rate. This widens the Committee’s campaign for banks to increase the savings rates offered to loyal customers, which in March saw Barclays UK, HSBC UK, Lloyds Banking Group and NatWest Group called into question. In letters sent yesterday, the Treasury Committee asked the banks to explain how increases to the base rate are passed on to savers, why rates on their easy access accounts are so much lower than the base rate, and whether they make loyal customers aware of higher rate savings options available to them.

Four more well-known banks scrutinised by Parliament for not rewarding loyal customers.

New legislation to hold poor savings rates accountable, says FCA

The UK’s main watchdog still encouraged savers to shop around for the best deals.

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