MPs have accused Britain’s biggest high street banks of seeking “to do as little as they can get away with” on raising savings rates for customers.
The Commons’ Treasury select committee stepped up its pressure after quarterly trading reports from banks over the past week and amid continued scrutiny from the financial regulator over their practices.
Harriett Baldwin, the Conservative chairwoman of the committee, said the Big Four banks of NatWest, Lloyds, Barclays and HSBC had been “far too slow to reward savers” through better rates on instant access savings accounts.
Latest figures from the banks show their margins have come under pressure, dampening the profit boom from rising interest rates. Shares in NatWest fell sharply last week after a fall in third-quarter margins was worse than expected, caused by customers moving cash into higher-interest savings accounts.
Despite these switches to better deals, however, Baldwin said there remained signs that banks were doing “as little as they can get away with to reward our constituents for saving”.
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The banks pay 1.4 per cent to 2 per cent AER, or annual equivalent rate, on their standard easy-access savings accounts, for lower deposit bands, compared with a Bank of England base rate of 5.25 per cent, according to Savings Champion, an analyst.
The Financial Conduct Authority launched a review in the summer to ensure that savers benefit from rising interest rates. It has pressed banks to accelerate increases as “many people are feeling the squeeze” from rising prices.
A spokesman for UK Finance, which represents banks, said savings rates had increased “a lot recently and the market is highly competitive”. The trade body added that the banks’ financial results“highlighted that customers are moving money into savings accounts”.
