In the publication of its interim report, Cash savings market study, the regulator said savers are still not shopping around for the best cash Isa rates and that many are holding their cash Isa savings with their personal current account provider.
In October 2013, the FCA launched a market study into the savings market and voiced concerns that low levels of switching would make it difficult for new Isa providers, such as challenger banks, to enter the market.
The FCA data came from existing savings providers, including six large providers, such as high-street banks and building societies, seven small and medium-sized building societies and seven small and medium-sized banks.
It found there were 17m cash Isa accounts with an unlimited term and 9m fixed-term cash Isa accounts. A total of £93bn was held in unlimited-term Isas and £91bn in fixed-term Isas.
This compared with £353.3bn held in easy-access savings accounts and £144.1bn in fixed-term bonds.
According to the FCA’s report, a core of cash Isa consumers had never switched and had held their account for at least 10 years.
However, Isa savers are more likely to switch than other savers. The FCA said this may be because they tend to hold more money in their savings accounts.
In December 2010, 3.4 per cent of Isa savers switched accounts, compared to 2.6 per cent of those with other cash savings. The figures for this report were 3.1 per cent and 2.8 per cent respectively.
