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Base interest rates skyrocket – but NOT when you save: the average instant access saver earns a paltry 1.16% a year in interest
Savers earn less than half the interest they received the last time the Bank of England’s base rate was 3 percent.
Research for The Mail on Sunday by data scrutineer Moneyfacts shows that in the wake of Thursday’s 0.75 percentage point rise, the average direct access saver is earning a paltry 1.16 percent a year in interest.
Pain: When the base rate was 3 percent in November 2008, the average rate was 3.63 percent
By contrast, when the base rate was 3 percent in November 2008, the average rate was 3.63 percent.
While interest rates could rise in the coming days, companies like Santander and Barclays are only paying 0.2 and 0.25 percent interest respectively on £10,000 on everyday saver accounts.
A saver, on the other hand, can earn 2.5 percent on a direct access account with Saga.
Moneyfacts’ Rachel Springall says: ‘High street banks are failing to pass on key rate hikes to savers. It is disappointing given the stress many households have with their finances.’
Anna Bowes, co-founder of Savings Champion, says: “After the Bank of England’s eighth consecutive rate hike, momentum has finally been created to push savings rates up.”
RCI Bank pays 4.6 percent on a one-year fixed-rate bond, while Lloyds Bank offers 5.25 percent on a one-year Club Lloyds Monthly Saver Account, with a maximum savings of £400 per month.