‘Simplicity is the ultimate sophistication’, wrote Leonardo da Vinci. The growing trend for more straightforward savings is encouraging, but there’s still plenty of room for improvement in the market.
It may have taken savings providers a while to come round to the idea, but ‘simplicity’ seems to be their new buzzword. Nationwide is the latest provider to scrap several existing accounts and replace them with a smaller selection of new products in a bid to simplify its savings range.
The building society follows in the footsteps of other big names, including Royal Bank of Scotland (RBS) and NatWest, which last year reduced the number of cash Isas on offer to one per brand, and HSBC, whose new Loyalty Isa has recently become its only on-sale cash Isa.
Tempted by teaser rates
As part of their efforts to make savings more straightforward, these providers have also removed introductory bonuses, which give short-term rate boosts to new customers before dropping off.
While these ‘teaser’ rates have their merits, it’s good to see existing savers being put first by getting rid of the special offers only new customers enjoy.
There’s further to go, though. Providers still need to confront the issue of ‘superseded’ accounts – which once paid a great rate but, in many cases, now pay a pittance – by proactively notifying savers that their account is closed to new customers, telling them what the interest rate is and whether there are better-paying accounts available.
While some providers have started to cut away these accounts, their prevalence means that the current simplification is only the first in many of the steps needed to heal the savings market.