There were concerns that banks wouldn’t pass on November’s 1.5% interest rate cut to mortgage borrowers - however, there have been no such worries for the savings market, where providers appear to have acted quickly to protect their own interests.
Following the decision on 6 November to cut the base rate by 1.5%, 24 savings account providers have cut their rates. According to uSwitch.com, several providers have even cut their rates by an additional 1.05% on top of the base rate cut.
For example, Lloyds TSB has cut its term deposit accounts by up to 2%, while Capital One Savings has reduced its variable rate accounts by up to 2%. Norwich & Peterborough Building Society, meanwhile, has slashed its Gold savings and Family Regular savings accounts by 2%.
Louise Bond, personal finance manager at uSwitch.com, accuses banks and societies of being more than willing to pass on cuts - when it serves their purposes.
“In the wake of the base rate cut numerous savings providers have taken drastic action in an attempt to safeguard their margins,” she adds. “An alarming 19 providers withdrew some of their products from the market [after the rate cut], immediately closing themselves to new business, and seemingly in an attempt to steer the focus away from future product launches with significantly less competitive rates.”
You can find the best savings accounts in Moneywise's daily round-up of the market.