The latest research from Moneyfacts showed last week’s rate rise may make little difference to savers with variable rates, with the biggest banks failing to match 0.75 per cent on easy access accounts even if the full 0.25 per cent uplift is implemented.
On a gross rate at £10,000, Bank of Scotland, Barclays Bank, Halifax, Lloyds Bank and RBS all offer 0.2 per cent on certain easy access accounts - a rate that would need an increase of 0.55 per cent to match the current Bank of England base rate.
NatWest offers 0.1 per cent on its internet saver account, Santander offers 0.25 per cent on its everyday saver, TSB 0.4 per cent on its easy saver account and HSBC offers 0.45 per cent on its online bonus saver but with no withdrawals.
Rachel Springall, finance expert at Moneyfacts, said as many providers continue to keep their cards close to their chests, savers may assume that they will benefit from the base rate rise within the next few weeks by default, but this is not guaranteed.
She said: "In November 2017, it took around a month before most savings providers passed on the rise, and at the same time, some brands were selective with which accounts to improve.
"As an example, savers who held a first direct bonus saver with a low balance received a rise of just 0.10 per cent, Halifax raised some accounts by 0.15 per cent and HSBC only added 0.2 per cent to its online bonus saver, and still offers an account paying just 0.05 per cent."
Ms Springall pointed out that all three brands were quick to pass on a 0.25 per cent rise to their mortgage customers, with their standard variable rates changing at the start of December 2017.
She added: "These minuscule savings rate rises are making very little difference to those who have a variable rate account with the biggest bank brands, which is why savers should use this as an opportunity to switch."
In the same report, Moneyfacts research showed challenger banks, supermarket brands and mutuals were dominating the easy access best buys sector as an alternative to the the rates offered by the bigger high street banks.
On the same criteria of a gross rate at £10,000, Coventry Building Society offers 1.4 per cent on its limited access saver and Birmingham Midshires offers 1.35 per cent on its BM internet saver account.
Ms Springall said the minuscule savings rate rises offered by leading high street banks are making very little difference to those who have a variable rate account, which is why savers should use this as an opportunity to switch.
She said: "A rate rise of 0.25 per cent equates to just £25 extra a year in interest on £10,000, but savers will find that challenger banks have improved their deals regardless of base rate activity and pay much better rates than the high-street banks - building societies are also playing their part by competing in this arena."
On the rate hikes, Tom Stevenson, investment director for personal investing at Fidelity International, said he expected this to be the only rate hike that the Bank of England makes this year and possibly well into next year.
This means the base rate is unlikely to overtake even subdued inflation anytime soon, and the average cash savings account is therefore unlikely to offer real returns for the foreseeable future, he predicted.
He added: "Even if you are able to find one of the few cash accounts out there that offer inflation beating interest rates, they often only last for 12 months and come with a number of restrictions.
"Over the medium- long term, keeping large sums in cash is almost a sure fire way to erode the value of your savings - with this in mind and with inflation likely to outpace interest rates for some time to come, the stock market continues to be your best bet for generating inflation-beating returns."
Mr Stevenson said while investing in stocks and shares may be more risky than keeping your money in cash, history showed that, over the long run, equities have significantly outperformed cash and continue to be the sensible choice for anyone looking for long-term real returns.
rachel.addison@ft.com
