Funding-for-lending will hurt savers: BSA
The government’s funding-for-lending scheme will almost certainly spell trouble for savers, the Building Societies Association has said.
A spokesman said: “The scheme is still in the early stages, but our rational is it is likely to affect savings rates as institutions will now have access to cheap funding and won’t have as much of a need to compete in the retail deposit market.”
However, she said it won’t necessarily apply to all providers as not all will choose to apply for the funding-for-lending scheme.
She said: “It’s a decision for each provider as to whether the cost of applying is worth the benefit.
“Building societies have a concern for savers and there are eight or nine savers per borrowers, so there is a difficult decision that would need to be taken to get that balance right.”