/ Money

Easing the savings trap

Proposals announced today would force firms to give clearer information to savers about the interest rates on their cash savings accounts and when they change – including the end of bonus rates.

A few years ago, I had some extra cash so I found a bank offering what was then a market-leading ISA. So far, so savvy. Feeling smug, and certain my money was working hard, I paid little attention to the account.

Fast forward 18 months and could I tell you what interest rate my ISA was paying? No chance. So I looked for it.

The rate wasn’t on my last statement; nor on my online account. Half an hour later I found it – buried in a hard-to-find page of my bank’s website. My smugness disappeared. The rate had dropped like a stone.

Such experiences were all too common – so in 2014, we launched a campaign to scrap the savings trap. At the time, you told us what you wanted to see.

Among those who commented was Malcolm who said:

‘I want the banks to tell us, with notice, when an account’s interest rate will change, and I would like to see bonus rates that expire after a year stop.’

Well, it looks like the Financial Conduct Authority’s (FCA) been listening – judging by proposals it’s announced today.

What changes are planned for savings accounts?

The regulator will force firms to provide clearer information on the interest rates on their cash savings products, and make them clearly alert customers to changes, including the end of bonus rates.

It’s also making it easier and quicker to switch between providers. No doubt it’s heard horror stories from people who’d tried to switch ISA providers to get a better deal then found it took months, with anxious periods when it appeared as though their savings had disappeared altogether.

Banks and building societies have left customers languishing in poor-value savings accounts for far too long.

Today’s move is a significant win for savers. Many people never switch savings accounts because they think it will make little difference, so it’s good that the FCA has listened to our calls to make savings providers do more to help you get a better deal.

The FCA is also proposing to publish information to highlight firms who pay poor interest rates to longstanding customers.

You might wonder what impact this will have now, when interest rates on savings accounts are pretty pitiful.

But things will improve, and when they do, you should now be a bit more confident that your savings provider, and the regulator, will be doing more to make sure you’re getting a good deal.

What do you think of the planned changes?

David Bricknell says:
24 July 2015

ISA’s seem like a typical banking scam. If you’re a standard rate taxpayer then you are invariably better off with a normal easy-access savings account but the bank has you in a grip which says if you move your money then you’ll lose all your previous savings benefits.

Chris Goodman says:
24 July 2015

I reckon that the Regulator should make the bankers offer ALL ordinary savings accounts also as cash ISAs at the same interest rate.

Fiona says:
24 July 2015

I totally agree the Banks are a pain in the neck. Forever changing rats which are crap to begin with

Ian says:
24 July 2015

In fairness to Tesco Bank, I was informed in writing, and in good time, when the interest rate on my savings account will change. This allowed me ample time to explore the market for a more attractive deal.

Basil says:
24 July 2015

Isa’s with Barclay’s from September will be less than 1%, it’s no wonder banks pay out such huge bonuses, greed or what.


I am a little surprised at the number of people who don’t seem to think they should actively manage their money. I agree that it is reasonable to expect a bank or building society to whom you have lent a sum of money to let you know in advance of an interest rate change, and I am glad this is now going to be mandatory, but it is still sensible to diarise these key events, like the end of a bonus period, so that you can take action in advance if necessary – and it’s a safety net in case the notification does not arrive or you don’t appreciate it’s urgency.

Obviously banks are in business to make money but I wouldn’t want to bank with one that didn’t.


I can see some very good reasons why so many people are unhappy with banks and building societies, John.

– In the past, generous interest rates were decreased to virtually zero without informing savers.

– It is common for banks and building societies to replace one account with another with the same terms and conditions and similar interest rate, while lowering the interest rate on the previous account to near zero. I have seen examples where the name of the account differs only in issue number. This is obviously done to catch out the unwary. Simple savings accounts are generally regarded as safe investments. I believe there is a strong case for ending this practice. I am not referring to fixed-term investments.


I entirely agree Wavechange and I have consistently criticised the unsatisfactory behaviour of the banks in several Conversations. Given this widely known state of affairs, however, it really does behove customers to take some responsibility for controlling their accounts. The banks are not our friends, we cannot trust them, and unless forced to do so they will not put our interests first. This is well known so we have to take precautions and not be so shocked when we are dumped high and dry on minimal interest rates when the promo rate comes to an end. At least this measure will redress that grievance but there are plenty of others around retail banking conduct that need addressing.

Referring to your first bullet point, on opening a savings account one is usually given [or picks up] a leaflet stating the key features of the account, or if done on-line sees the same information on the screen [and I am not referring to pages of small print t-&-c]. If the interest rate is for a limited period this is invariably stated and it is a reasonable assumption that we will take note of it. Of course, what the banks have never said in that kind of literature is “We won’t send you an advice before this happens so please make a note of it now”. In response to having failed to give their customers that degree of support in the past they are now going to have to do it in the future and hopefully the days of this particular complaint are numbered. But, you can lead a horse to water . . . etc, and it will be interesting to see the eventual result in terms of customers moving their money around; if that happens routinely in pursuit of higher interest rates to the extent that it impacts on bank revenues, then rate adjustments or new terms & conditions will be introduced to mitigate the effects.