The Financial Conduct Authority (FCA) has issued a stern warning to banks demanding they justify the interest rates they offer to savings customers or brace for 'robust action'
UNDER SCRUTINY: Financial Conduct Authority has decided to take action as banks come under huge pressure to up their savings rates
Shockingly, the FCA revealed that only nine of the country's largest savings providers passed on a mere 28 per cent of interest rate rises to their easy access deposits between January 2022 and May 2023, despite raising rates on mortgage products. Even fixed-term savings, where cash is locked away for a set period, saw only 51 per cent of the Bank of England's interest rate increases being passed on.
Additionally, it plans to publish an"analysis" of easy-access savings rates, naming the laggards and compelling lenders to encourage customers to explore higher-rate options. These actions are part of a comprehensive 14-point plan devised by the financial watchdog.
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