FCA is cracking down on big banks and their slowness in passing on base rates to easily accessible accounts

As part of its action plan, the FCA will:

1. Require companies that offer the lowest rates to submit their fair value assessments for consumer tax purposes by August 31, 2023 and take firm action against those who fail to demonstrate fair value by the end of 2023.

2. Review the timing of changes in corporate savings rates whenever there is a change in the base interest rate.

3. Every six months, publish an analysis of companies’ easily accessible savings rates, listing best to worst distribution.

4. Analyze the difference between on-sale and off-sale products, challenge companies to explain how major differences provide real value, and consider further action if this gap does not continue to close.

5. Assess companies’ performance on cash ISA to cash ISA conversion.

6. Conduct a further analysis of the contribution of cash savings to company profitability.

7. Assess the effectiveness of companies’ engagement with customers by the end of March 2024 and take action if companies have not effectively delivered the results set out by the FCA.

8. Work with others, including the Money and Pension Service, to identify what else can be done to help consumers save regularly and thus strengthen their financial resilience.

The FCA expects companies to:

9. Starting today, use their assessments of the fair value of savings products on sale to reassure themselves and the FCA, where appropriate, that they represent fair value to customers.

10. Accelerate their fair value assessments for accounts that don’t sell before the July 2024 consumer tax deadline for accounts that don’t sell.

11. Take action to encourage their customers with lower paying savings accounts or non-interest bearing accounts to consider alternatives.

12. Keep a close eye on the effectiveness of customer communications, with larger firms providing the FCA with a review by the end of 2023 and any follow-up actions they take.

13. Support consumer financial resilience by encouraging customers to save and/or look for higher rates, with the largest companies committing to support a targeted communication campaign per company.

14. Consider how they can support their customers to access MoneyHelper’s free advice.