Some savers being short-changed by poor rates, says Which?

UK Finance said it would ‘always encourage customers to shop around for the deal that works best for them’.

Many savers are still getting poor rates from high street banks, according to Which? (Nick Ansell/PA) (PA Archive)

Many savers are still getting poor rates from high street banks, according to Which?

The consumer champion’s analysis examined savings rates between January and June 2024 on a range of options.

Which? said its findings suggest the gap between traditional high street banks and newer challenger banks and building societies was most pronounced on instant-access savings accounts.

In January, major banks were offering rates of 1.9% on these accounts on average. Building societies averaged 2.9%, and challenger banks provided 3.3%.

By June, the average rate for major banks fell to 1.6%, while the rates for building societies and challenger banks remained stable, Which? said.

As savers face the prospect of base rate cuts, banks will likely be quick to implement any reductions, yet our research shows they have dragged their heels in responding to calls for better rates

Sam Richardson, Which? Money

A new consumer duty came into force for financial firms in July 2023, requiring them to put consumers at the heart of what they do, including when designing products. The duty will also come into force for financial products which are off-sale later this month.

Sam Richardson, deputy editor of Which? Money, said: “It is completely unacceptable that big banks continue to short change savers.”

He added: “As savers face the prospect of base rate cuts, banks will likely be quick to implement any reductions, yet our research shows they have dragged their heels in responding to calls for better rates.”

We would always encourage customers to shop around for the deal that works best for them

UK Finance spokesperson

The analysis by Which? was based on Moneyfacts data covering savings accounts between January and June 2024. Rates were based on an initial deposit of £10,000.

A UK Finance spokesperson said: “The savings market is highly competitive and customers have a wide range of options to choose from across different firms and types of account.

“The rates offered will be based on a number of things, not just the Bank of England’s base rate. We would always encourage customers to shop around for the deal that works best for them.”