TSB will change its mortgage rates to match the full Bank of England base rate rise, but savings customers will not benefit from the same increase.
Following the monetary committee’s unanimous vote to raise the base rate by 0.25 of a percentage point to 0.75 per cent last week, TSB today announced interest rates on its variable rate mortgages will increase by 0.25 per cent as of 1 September.
However, interest rates on TSB’s variable rate savings accounts will increase by just 0.1 per cent from 1 September for new and existing customers.
The only savings accounts to benefit from the full 0.25 per cent increase will be the junior cash Isa and young saver account, in a move a TSB spokesperson said demonstrated the lender’s commitment to encourage the younger generation to save for the future.
Those TSB customers with a fixed-rate mortgage will not be affected by the rate increase.
Martin Stewart, founder and director at London Money, said: "I do not think we can tar TSB alone for not passing on the full benefit to savers as many other banks have failed to do the same - it is a business not a charity and savers can vote with their feet in the same way borrowers can.
"The writing for savers has been on the wall since 2009 and the prudent have been sacrificed to save the profligate. I can not see any point in the future were that will change significantly.
"I am currently referring all my existing TSB clients back to them as I am not currently able to transact product transfers since their IT meltdown - I would suggest therefore that they have a lot of work ahead of them to not only build trust with their savers but with the wider broking community as well."
Earlier today (7 August), FTAdviser reported that Lloyds Banking Group said it would change their mortgage reversionary rates as lenders slowly begin to implement last week’s base rate increase.
It said it would raise its Lloyds and Halifax variable mortgage rates but is yet to announce any changes to its savings rates.
From Saturday 1 September, the Halifax homeowner variable rate and the Halifax standard variable rate will both increase from 3.99 per cent to 4.24 per cent - matching the full 0.25 per cent rise.