Almost a quarter of the UK's variable rate savings accounts have interest rates of 0.1 per cent or less according to new figures from consumer finance website Moneyfacts.co.uk. Meanwhile, nearly half of all such accounts pay interest of 0.5 per cent or less.
Moneyfacts' Michelle Slade believed that banks were cutting rates ahead of new regulations which have come into force this month stating that banks must now give two months' notice before cutting interest rates on savings accounts. Indeed, just 3.5 per cent of savings accounts are paying a higher rate of interest than they did in March, while 10 per cent have reduced the amount they are paying.
The figures offer the latest confirmation that savers, and pensioners in particular, have suffered at the hands of the numerous interest rate cuts from the Bank of England. It is variable rate mortgage holders that have benefited, with repayments on home loans a fraction of what they were two years ago. Indeed, the average outstanding mortgage rate was just 3.58 per cent in September, compared with 5.81 per cent in the same month of 2008. 58 per cent of the UK's mortgage holders are now on variable rate deals.
Bank Savings Accounts Still Yielding Tiny Returns
Financial Services > e-banking > Banking news
Bank Savings Accounts Still Yielding Tiny Returns
Fri, 06 Nov 2009
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