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?
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