Savings account providers grasp base rate cut

by Gill Montia

Story link: Savings account providers grasp base rate cut

New research from Moneyfacts.co.uk shows the extent to which UK savers are losing out as a result of this month’s cut in the Bank of England’s base rate, to 3%.

The financial website has revealed that rates on almost a quarter of variable rate savings products have already been reduced.

So far, 22% of savings account providers have responded to the Bank’s record base rate reduction of 1.5% but of this group, the majority have applied the full cut.

According to Moneyfacts, if the remaining providers pass on the full rate cut, 12% of the UK savings account market will end up paying zero interest.

Twenty-seven per cent would pay less than 1%, and 52% would pay 2% or below.

Analyst at the firm, Michelle Slade, comments that at the beginning of November, there was an abundance of accounts paying well over 6% but she expects these to disappear in the days ahead.

Ms Slade advises that it is now more important than ever for savers to compare savings accounts and is optimistic that as banks continue to concentrate on building up their retail deposits, the savings market will remain competitive.