Big banks face grilling over poor deals

>

The chairman of the powerful Treasury Select Committee says many savers receive interest rates so low that saving is almost useless

The chairman of the powerful Treasury Select Committee has told The Mail on Sunday that many depositors receive interest rates so low that saving is almost pointless.

Harriett Baldwin, Conservative MP for West Worcestershire, spoke to the MoS ahead of the committee’s meeting with executives from the big four banks on Tuesday.

She said: “Interest rates are rising, but some of our constituents are receiving such low savings rates that their money might as well be kept under the mattress. We will be questioning our largest banks on this, as well as the outlook for the UK mortgage market and bank branch closures.”

Struggle: At the top of the Commons committee’s agenda are the poor savers who still get from the big banks

At the top of the Commons committee’s agenda are the bad deal savers who are still getting from the big banks, despite the increase in key interest rates from 0.1 to 4 percent since December 2021. Experts believe that the banks are have benefited by widening the gap between the rates they impose on borrowers and those they pay on depositors.

Data from savings expert Moneyfacts shows that at the beginning of December 2021 (when the base interest rate was 0.1 percent), the average easily accessible savings account paid 0.2 percent. But just before last week’s Bank of England rate hike, the average had only risen to 1.73 percent, despite a rise in key rates to 3.5 percent. Some of the equivalent rates paid by banks are as low as 0.54 percent.

X