Savers should be warned about rate changes

Posted 2008-01-6

Nationwide Building Society believe that consumers should be told when introductory savings rates expire and fall to lower levels. These calls come at a time when average interest rates are below inflation.

Nationwide claims that its rivals are taking advantage of customers who fail to monitor their savings accounts. Currently, many banks offer high interest accounts for a year, before the products drop to below the Bank of England’s base rate, without warning.

Matthew Carter, Nationwide Director of Savings said:

“The savings market is a highly competitive one and providers are vying to take market share. Some providers seem more interested in boosting profit and achieving best buy status than actually offering long term good value to their customers.  Consumers are told when their mortgage deals are due to change and it shouldn’t be any different for savers. With introductory deals becoming more common place, the society is concerned it is becoming even harder for savers to make the best decision.”

Lisa Taylor, of personal finance website moneyfacts.co.uk believes that accounts with a steady rate of interest, rather continually shopping round is the best tactic for the consumer in today’s climate.  Recently, savers have seen rates reduced with the 0.25% reduction on the base rate in December. Taylor said:

“Often a simple no strings account will offer an equally good return, without the need to jump through hoops or navigate a maze of complex terms and conditions.  Some savers have seen their rates axed by more than double the base rate cut. And with many of the accounts already offering uncompetitive rates, the proportion of the rate shaved off is much higher. Take the example of the Halifax Liquid Gold, which saw a 0.36% cut. When we consider the rate was only 1.36% in November, the cut means more than a quarter the whole rate vanishing.”

Leave a Reply