The rates payable on 10% of variable rate savings accounts have been cut since March 2009, despite the Bank of England base rate remaining at a constant 0.5%.
On 5 November, the Bank’s Monetary Policy Committee held the base rate at 0.5% for an eighth successive month, but statistics from the financial data firm Moneyfacts show that many savings providers have not rewarded consumers with consistent returns on their cash.
Slashed savings rates
In its latest survey of the savings market, Moneyfacts found that 48.8% of all variable rate savings accounts on the market pay 0.5% or less to customers on the cash they put away. Meanwhile, 22.8% of accounts pay 0.1% or less.
Several big name banks are among those savings providers who have slashed their rates since March. Bank of Scotland and Halifax have reduced savers’ rates by between 0.05% and 0.12%, while Yorkshire Bank has cut rates by between 0.50% and 0.75%.
Michelle Slade, spokesperson for Moneyfacts, commented: ‘Savers are already experiencing some of the lowest rates ever and this will be another bitter blow to take. Savers will be asking how providers can justify cutting rates further, when the bank base rate has remained on hold.’
Find the best savings rates
Which? Money editor James Daley said: ‘This news underlines the importance of keeping a close eye on your savings – and of voting with your feet when you’re getting a poor return on the cash you put by.
‘While almost half of the variable rate savings accounts on the market are paying bank rate or less, consumers who take the time to shop around for a great deal could earn above 3% AER.
‘Switching to a new account should be a simple and painless process, and Which? offers a range of that will help you choose the right home for your money.’
Check out our savings account review, Cash Isas review and fixed rate savings account review for information on where to find the best rates and an explanation of the features each different account offers. For more in-depth information on how savings accounts work, read .
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