24 Nov 2024

Savings bonuses are disappearing fast

Just when savers thought it couldn’t get any worse, it did. Moneyfacts research shows that not only are savings rates falling to devastating lows but introductory bonuses are all but disappearing too.

The table below shows the number of accounts over the last three years, including August 2012 when Funding for Lending was launched as an indication of what happened to accounts straight after launch.

The figures reveal that between January and August 2012, the number of accounts with and without bonuses was steady but after August had fallen sharply.

In addition, the bonuses on offer are plummeting along with basic rates.

Easy Access Accounts
Date	Number of Accounts	Number with a bonus	Highest bonus	Average bonus	%age with bonus
1.1.11	541	101	3.00%	1.06%	18.67
1.1.12	502	79	2.70%	1.34%	15.74
1.8.12	470	73	2.70%	1.35%	15.53
1.1.13	416	46	2.00%	1.02%	11.06
Source: Moneyfacts.co.uk

Notice Accounts
Date	Number of Accounts	Number with a bonus	Highest bonus	Average bonus	%age with bonus
1.1.11	264	35	2.12%	1.03%	13.26
1.1.12	257	24	1.55%	0.99%	9.34
1.8.12	263	23	2.00%	1.02%	8.75
1.1.13	212	11	1.25%	0.96%	5.19
Source: Moneyfacts.co.uk

Sylvia Waycot, financial expert at Moneyfacts.co.uk, said:

“Providers no longer needing savers’ money to prop up bank balances, thanks in part to the Government’s Funding for Lending Scheme, have started streamlining their accounts.

“We now have less choice than we had four months ago, the rates are very much poorer and to add insult to injury, the introductory bonus has all but disappeared as banks shy away from attracting the attention of desperate savers.

“Every year brings new problems; last year we worried we might forget when the bonus ended on our account and this year we will be lucky to find an account that offers a bonus.

“Bonuses gave at least 12 months respite from the historically-low interest rates currently paid. Worryingly, today out of 416 easy access accounts only 46 have a bonus and notice accounts are worse still with only 11 offering a bonus out of 212.”

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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