The Financial Conduct Authority has warned some loyal customers would be better off opening a different savings account, after data revealed some cash Isas pay as little as 0.01 per cent.
The regulator has today (18 July) published the second set of data showing the lowest interest rates offered by 32 providers of cash savings accounts and Isas.
The figures form part of the FCA’s so-called ‘sunlight remedy’, which looks at how companies treat long-standing customers.
HSBC, Danske Bank, and Ulster Bank had the worst rates on some of their savings accounts, offering just 0.01 per cent interest, while both Cumberland Building Society and Coventry Building Society offer as much as 1.5 per cent.
This comes as consumer group Which? said savers face an uphill battle as loyal customers suffer at the hands of “woeful” interest rates.
Christopher Woolard, director of strategy and competition at the FCA, said getting better outcomes for customers with cash savings accounts will be one of the regulator’s priorities this year, and pledged to help loyal customers get better rates.
From December 2016, the FCA plans to force firms to provide customers with clearer information in a summary box to help consumers compare savings accounts.
Companies will also have to remind consumers about changes to interest rates or the end of an introductory offer, as well as provide a quicker and easier switching process.
Mr Woolard said: “Our new rules, coming into force at the end of the year, will help consumers get the facts they need to make an informed decision about what to do with their savings,” he said.
“In a well-functioning market, providers should be competing to offer the best possible deal to consumers.”
The FCA has also been conducting a cash savings market study, launched in 2014, involving trials with 130,000 consumers, which looked at ways to encourage consumers to switch to better savings accounts.
While the switching box and the return switching form had some positive effects, the findings found the form only encouraged switching within the same bank, and did not increase switching to better accounts offered by other providers.
After the trials, the FCA said it will investigate options to encourage more shopping around.
katherine.denham@ft.com
