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Unfairness as savers aren't receiving hikes in the base rate

Journalist: Sarah O'Grady, The Daily Express

ended 09. February 2023

Savers are still waiting for recent rises in the base rate to be passed onto them.  Mortgage payers meanwhile see their mortgages become more expensive immediately.  The Treasury committee has taken to task the heads of four of the UK's biggest banks for not acting quickly so savers can benefit from higher returns.  I'm looking for opinions on this unfairness. Any examples of very low savings rates  in comparison or mortgage rates welcome.

6 responses from the Newspage community

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Fanny SnaithVerified
Owner at Fanny Snaith - Certified Money Coach
Are the banks being greedy? I think so. The Lloyds cash ISA today is at 0.6% for balances up to £25k. It's a joke, but nobody bar Lloyds is laughing. Offering that product is treating the customer with disrespect in my opinion. Other accounts offer higher interest rates but they are still pretty low or tagged with confusing rules. For example, the Club Monthly Saver offers 5.25%, which sounds good but to get it you can only pay in up to a certain amount and you have to pay a fee for the current account you have to have. Sort it out banks, and make saving simple and worth our while.
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Daniel Jones0
Lifestyle Financial Planner at DGS Chartered Financial Planners
Unfortunately, this is an all too common occurrence. There are still many, often big name High Street banks paying less than 1% interest on cash savings and cash ISAs. I saw a big bank today paying a client just 0.55%. The thing to do is vote with your feet. Showing loyalty to these banks, who are showing none to you, won't boost your returns. There's a choice of instant access savings accounts out there currently paying over 3%. If you're getting less than this with your bank, and the interest rate rises aren't being applied to your savings, then it's time to move on. You can often open a new account within minutes online so don't let apathy hold you back.
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Samuel Mather-HolgateVerified
Independent Financial Adviser at Mather and Murray Financial
There is built-in unfairness in banking business models, which is why you see NIMs, or Net Interest Margins, increase as the central bank base rate increases. It allows banks to push this differential even further and, as a result, you’ll see their share prices balloon. Take a look at any bank share price pre-2008 and now. This is a result of low NIMs. If savers are on genuine base rate trackers, this is more naughty by the banks and something the Government can look at, but again it’s no surprise to see them acting in this way when their bottom line is affected.
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Scott GallacherVerified
Director at Rowley Turton
It's a tale as old as time - the banks take care of themselves and their bottom line, while savers and mortgage payers bear the brunt. The disparity between the current savings rates and mortgage rates only highlights the lack of fairness in the banking sector, and it's high time the Government held the banks accountable. But, of course, when the banks get into trouble it's the taxpayer that has to bail them out.
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Austyn JohnsonVerified
Founder at Mortgages For Actors
It is completely unfair. Savings and interest rates should move together. Banks have a duty to ensure they are treating their customers fairly and making them miss out on extra savings especially when times are as hard as they are currently, is simply not cricket.
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Rhys SchofieldVerified
Brand Director at Peak Mortgages and Protection
In fairness since base rate went up, mortgage fixed rates being offered actually went down across the board and continue to do so. The banks haven't been reducing savings rates to match so in that context savers aren't actually being too hard done by. In saying that though I'm sure they have margin to do a bit more for savers.