hiked rates and only four financial service providers have passed on the to all or nearly all customers holding variable-rate savings accounts. They include Atom bank and Newcastle, Suffolk and Cambridge building societies, which raised their rates by 0.15 per cent across all their ranges or on a majority of them. Meanwhile, several firms have boosted their rates either on just one or a handful of accounts so far, while other banks and building societies have reduced their returns on savings.
This has left a vast majority of savers who have been impatiently waiting for a raise in interest rates that may never come. Even the future doesn’t look any brighter for them, with some experts taking the view that even another increase in February by the BoE will make no difference on the rates offered by firms.
According to Adrian Lowery, a personal finance expert at Bestinvest, “Most of the big banks are uninterested in attracting savers’ deposits”, which means they are unlikely to pass on base-rate hikes in “any meaningful way”. Sarah Coles, a personal finance analyst at Hargreaves Lansdown, appeared to be in agreement with Lowery. “The banks have plenty of cheap money from the government, so they are in no rush to raise rates to attract more from savers,” she said.
Even if there is a slight nudge up in the rates that are being offered to savers, experts point out that rising inflation will eat away at the value of savings. At 5.4 per cent, inflation jumped to the highest in almost 30 years, and there is no standard savings account that can outpace this historical rate, which means it is necessary for savers to get the best deal to soften the impact of the rising cost of living. “It’s imperative that savers continue to monitor and switch if they are on a poor rate,” Rachel Springall, Finance Expert & Press Officer at Moneyfacts, said.
