BANKS FACE ACTION OVER POOR RATES

Fca Tells Uk Lenders To Offer Savers Better Value

Chris Dorrell

THE CITY regulator has ramped up the pressure on the UK’s largest banks, warning that it will take “robust action” against lenders that do not offer savers a fair deal.

Under rules announced yesterday, the Financial Conduct Authority (FCA) said firms will be “required to justify” whether their rates offer fair value by the end of August, or face consequences.

“If we see low savings rates –and those rates continue – we will work with the banks and make our views known,” Sheldon Mills, the FCA’s consumer lead, said. Mills stressed that “all our powers are available” to ensure banks are offering fair value, but ruled out a minimum rate saying the FCA is not a “price regulator”. The watchdog will also re- view the timing of firms’ savings rates changes each time there is a base rate change.

Banks have come under immense pressure from politicians and regulators for failing to pass on base rate increases to the £1.5trn savings market, particularly in easy access accounts which make up 60 per cent of balances across the nine largest banks.

£Data released by the FCA showed that the nine largest banks have passed through just 28 per cent of base rate increases to easy access savings accounts since the beginning of last year.

These banks are Lloyds, Natwest, HSBC, Santander UK, Barclays, Nationwide, TSB Bank, Virgin

Money and the Co-operative Bank. While the rate of pass through had accelerated from August last year, Mills said “it needs to speed up, and we will use the consumer duty to ensure that”.

Many have suggested that in order to ensure rates are passed through, banks should communicate more proactively with savers to ensure they are getting the best deal.

Around £250bn is held in accounts that do not earn any interest, according to the Bank of England.

Harriett Baldwin MP, chair of the Treasury Committee, said “savings earning little interest can be made to work harder, it will help with the cost of living and help to tackle inflation”.

Eric Leenders, managing director of personal finance at UK Finance, said: “Savings rates have increased recently and there are a lot of good accounts on the market – UK banks have passed through a greater proportion of interest rate rises to savers than in other countries.”

CALLED UP BT picks Allison Kirkby as telecoms giant’s next chief exec having transformed businesses,” Adam Crozier, BT’s chairman, said yesterday.

TELECOMS giant BT yesterday announced Allison Kirkby as the firm’s next chief executive.

Kirkby, the former chief exec of Nordic telecoms firm Telia, will take the reins from outgoing boss Philip Jansen in January next year “at the latest”, the firm said. Kirkby, who has been a nonexecutive director at BT since 2019, will become the company’s first female boss in its 170-year history.

Kirkby said she felt “incredibly honoured” to have been appointed because it is “such an important company for the UK”.

She said she thinks BT will play “an even more important role going forward” due to its heavy investment in digital infrastructure and in the modernisation of its services.