interactive investor comments on the FCA’s new plan to ensure banks are passing on interest rate rises to savers appropriately.
Commenting on the FCA’s new 14-point action plan to ensure banks and building societies are passing on interest rate rises to savers appropriately, Myron Jobson, Senior Personal Finance Analyst, interactive investor, says: “The City watchdog is cracking a whip using its newly acquired powers under the Consumer Duty framework to force banks and building societies to give customers a fair deal on savings products.
“Paltry savings rates offered by leading banks are a bitter pill to swallow for savers whose wealth is being eroded by a double whammy of inflation and rising borrowing costs.
“There is a sense that the same amount of energy that has gone into upping the cost of mortgages is has not been exerted when it comes to upping savings rates. It has taken some savings providers months to pass on higher rates to savers – if at all. But saving rates have picked up thanks, in part, to intense scrutiny from the FCA and MPs who have challenged some banks and building societies that had been miserly with their savings rate increases. The regulator hopes that its 14-point action plan will keep up the pressure.
“However, any reprieve in cash savings rates is being drowned out by the stubborn persistence of high inflation - with the real value of savings remaining in the doldrums. Those who can afford to put money away for five years or more should consider investing for the potential of long-term inflation-beating returns that far outstrip savings rates.”
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