Tesco Savings reducing rate

Gromitt

Had a letter from them recently saying they are reducing their rate from 0.75% to 0.60% effective from some date in January as they are not able to sustain the high rate due to the current market.

Obviously trying to claw back as much money as possible after their recent profit forecasting troubles.

I do wonder however how many people actually have any kind of significant sums with them at 0.75% though. I think my balance is about £25.

eastofeden

I imagine most people on here have the account in order to fulfil a direct debit elsewhere and so will not be very concerned about this rate drop!

Thrugelmir

Gromitt wrote: »

Obviously trying to claw back as much money as possible after their recent profit forecasting troubles.

Tesco bank operates in a commercially competitive market that is under increasing regulatory cost pressures. I doubt that the decision has anything to do with the supermarket operation. If anything the banking operation is more likely to be sold off to raise capital.

HarryD

Thrugelmir wrote: »

Tesco bank operates in a commercially competitive market that is under increasing regulatory cost pressures. I doubt that the decision has anything to do with the supermarket operation. If anything the banking operation is more likely to be sold off to raise capital.

I think Tesco Bank is actually run by RBS? Just a marketing front end. So perhaps it's RBS's cost pressures that are the factor here.

retiree

HarryD wrote: »

I think Tesco Bank is actually run by RBS? Just a marketing front end. So perhaps it's RBS's cost pressures that are the factor here.

Tesco Personal Finance was indeed originally a 50:50 venture with RBS, but in 2008 Tesco bought out RBS's stake and the project was subsequently rebranded as Tesco Bank.

polymaff

Gromitt wrote: »

Had a letter from them recently saying they are reducing their rate from 0.75% to 0.60% effective from some date in January as they are not able to sustain the high rate due to the current market.

Obviously trying to claw back as much money as possible after their recent profit forecasting troubles.

I'd love to think that this is just a Tesco-related special case. Interest rates for savers seemed to bottom out this year - although there have been drops in 2014, and I'm not aware of any rises in that period. Maybe that was all in anticipation of BoE rate rises late in 2014 / earliy in 2015. Now Carney is pushing that event way, way over the horizon perhaps we have to expect further drops across the board.