Which? members have revealed their biggest savings gripes of 2013 and revealed frustration with the impact of the government’s bank lending scheme.
They told us they were ‘losing money by saving money’, were fed by with ‘derisory rates offered by banks’ and felt let down by the financial support given to banks.
Low interest rates were by far the largest source of irritation for 58% of Which? members. And with the average interest rate for instant access accounts at a measly 0.63% for £5,000 its easy to see why.
Many members now in retirement who are reliant on savings to supplement their pension income felt resentful that they have no other option but to keep money in savings accounts, despite rock bottom rates. As a result, their nest eggs have been losing value through inflation.
Funding for Lending frustration
The source of many members’ frustration was aimed at the Bank of England’s Funding for Lending scheme, which has given banks access to around £80bn in cheap funding.
Many reported feeling let down by the scheme, which has resulted in artificially low interest rates being offered across savings accounts, as banks have instead been competing to lend to mortgage borrowers.
Savings loyalty not rewarded
The disparity in savings deals for new customers and those for existing customers was also a major source of frustration. Thirteen per cent told us they were fed up with poor rates on offer to existing customers, while 7% said they had enough of better deals being given to new customers.
A total of 8,548 Which? members took part in our annual ‘What’s in your wallet survey’, which tracked the biggest financial frustrations of 2013.
One in 10 told us that they were fed up of having to switch account every year to get the best deal.
You can find out what you’re earning on your savings and how to switch to a better deal by checking the Which? savings rate booster.