FCA: Savers get returns as low as 0.01%

• 8 December 2015
• From the section Business

Several UK banks and building societies are offering savers returns as low as 0.01%, the City regulator has revealed.

The Financial Conduct Authority (FCA) published a name-and-shame list, as part of its review of the savings market.

Six organisations, including HSBC, offer rates on cash of 0.05% or less, even before tax is taken into account.

A further six banks or building societies, including Santander, offer rates as low as 0.1%.

The FCA pointed out that the institutions named do offer higher returns on other accounts, and urged savers to switch to better deals.

The return on cash accounts available in-branch was the poorest, followed by Individual Savings Accounts (Isas) in-branch.

For those with £1,000 to invest, some will therefore be getting as little as 1p a year in interest.

Among Isa accounts, the lowest interest rate was 0.1%, offered by Santander. Another ten banks offer 0.5% or less.

The FCA is calling it “sunlight data” – as the figures shine a light on the lowest rates being offered.

As a trial, the list will be published every six months for the next year and a half.

At the same time as publishing the list, the FCA announced new measures to force firms to provide clearer information on interest rates.

From December 2016, banks and building societies will have to tell consumers when interest rates change, and when introductory offers run out.

The new rules will include:

• key information to be put in a summary box, and shown to the consumer at the point of sale
• interest rates must be displayed “prominently” alongside the account balance
• firms must provide a “prompt and efficient” switching service to other accounts

“With many savers never switching because they don’t think it will make a difference, our rules will help consumers get the information they need to shop around,” said Christopher Woolard, director of Strategy and Competition at the FCA.

“In a good market, providers should be competing to offer the best possible deal and should a consumer wish to move accounts, they should be able to do so with the minimum of fuss.”

The consumer association Which? described the announcement as a step forward.

“These reforms, when they’re eventually in place, should inject some much needed competition into the market and help consumers move away from savings accounts with dismal rates,” said Richard Lloyd, the executive director of Which?