Savers left out in the cold
So far, rates have been cut on just 22% of variable rate savings products, with most providers opting to pass on the full 1.50% cut or more.
If the remaining providers pass the cut on in full, then based on a £5K balance we could potentially end up with 12% of the market paying no interest whatsoever, 27% paying a rate of less than 1% and a staggering 52% paying a rate of 2% or less.
(See Appendix for details of which providers have cut rates and by how much.)
Michelle Slade, analyst at Moneyfacts.co.uk, comments:
“With mortgage lenders not passing the cut on in full, savers were hoping that they would get off lightly, but so far their optimism has been misplaced.
“At the start of the month, there was an abundance of accounts paying well over 6%. These are now disappearing fast and will no doubt be gone by early next week as more cuts are announced.
“It is now more important than ever that savers review the rate they are getting, as with over half the market possibly receiving a rate of 2% or less, they could be left seriously out of pocket.
“Rates of over 5% may still remain, but these will be few and far between. Some of the best rates on offer from those who have already cut rates, or launched accounts since the base rate cut include:
Institution |
Account Name |
£5K |
ICICI Bank UK |
HiSAVE Savings |
5.50% |
Anglo Irish Bank |
7 Day Notice Issue 2 |
5.40% |
Anglo Irish Bank |
Easy Access Deposit Issue 2 |
5.25% |
Northern Rock |
E-Saver |
5.15% |
Whiteaway Laidlaw Bank |
60 Day Bonus |
5.06% |
Source: Moneyfacts.co.uk 25.11.08 |
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“With banks still remaining wary about lending to each other, their savings book will remain an important part of their strategy.
“They will not want to drive their savers into the arms of their competitors, so hopefully we may see other providers restricting the cuts they make.”
Appendix
Provider |
Cut |
Products affected |
Marsden BS |
by 0.50% |
All except direct A/cs |
ICICI |
by 0.66% |
All (only 1 account) |
Manchester BS |
by up to 1.00% |
All |
Anglo Irish Bank |
by 1.15% |
All |
Earl Shilton BS |
by up to 1.25% |
All (Heritage increased by 0.25% but bonus reduced by 1.50%) |
Norwich Union |
by 1.35% |
Only one tracker product |
HSBC |
by up to 1.49% |
All |
ASDA |
by 1.50% |
All (Only have 1 account) |
Cater Allen Private Bank |
by 1.50% |
All (Only have 1 account) |
FirstSave |
by 1.50% |
All (Only have 1 account) |
Julian Hodge Bank |
by 1.50% |
All |
Lloyds TSB |
by 1.50% |
Easy Saver 2012 |
Marks & Spencer Money |
by 1.50% |
ISA |
National Savings & Investments |
by 1.50% |
Direct ISA only |
Ruffler Bank |
by 1.50% |
All except ISA |
The Co-operative Bank |
by 1.50% |
Tracker rates |
United Trust Bank |
by 1.50% |
All |
West Bromwich BS |
by 1.50% |
|
Post Office® |
by 1.50% |
All |
Bradford & Bingley |
by up to 1.50% |
All |
Butterfield Private Bank |
by up to 1.50% |
All (35 day a/c £50K tier increased by 0.50%) |
Coutts & Co |
by up to 1.50% |
All (Only has 1 account) |
Investec Bank (UK) |
by up to 1.50% |
Direct Reserve only (High 5 changes weekly) |
Mansfield BS |
by up to 1.50% |
All (trackers already changed 7.11.08) |
Northern Bank (NI) |
by up to 1.50% |
All |
Saffron BS |
by up to 1.50% |
All |
Sainsbury's Bank |
by up to 1.50% |
All |
Tipton & Coseley BS |
by up to 1.50% |
All |
Triodos Bank |
by up to 1.50% |
All |
Whiteaway Laidlaw Bank |
by up to 1.50% |
Instant Access Savings/Others |
Newbury BS |
by up to 1.50% |
All |
First Direct |
by up to 1.51% |
All |
Progressive BS |
by up to 1.55% |
All |
Chelsea BS |
by up to 1.65% |
All |
Ulster Bank (NI) |
by up to 1.75% |
All |
National Counties BS |
by up to 1.80% |
All |
Wesleyan Savings Bank |
by up to 1.80% |
All |
Capital One Savings |
by up to 2.00% |
All (didn't change with last BR cut) |
Close Brothers |
by up to 2.00% |
All/Money Market Reserve (did not change Oct) |
Hoare & Co |
by up to 2.00% |
All |
Vernon BS |
by up to 2.00% |
All |
Source: Moneyfacts.co.uk 25.11.08 |
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Moneyfacts Group
Moneyfacts is the UK’s leading independent provider of personal financial information and our data is used and trusted throughout the financial industry.
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