Can MSE put pressure on banks to PASS ON the interest rates to those with Savings Accounts?

friolento

h1n1 said:

Bridlington1 said:

h1n1 said:

For too long, banks have been paying much below the BoE base-rate when it comes to interest for those with savings accounts. When the base-rate is increased, they almost instantly increase APR!
Savers are getting ripped off again... please can MSE put pressure on banks, like Barclay's to increase saving interest rates on par, or not far from, the BoE base-rate !  

Why should MSE put pressure on banks to increase savings interest rates? You're the one who chooses where you keep your savings, nobody forces you to stay with Barclays and as already mentioned there are many accounts on offer that pay 5%+. If you're not happy with the rate of interest you're currently getting on your savings then there are a couple of options:

1. Move your money to a better paying account. It's not difficult, just open a higher paying account and move your money into it.
2. If you can't be bothered to do the above then it can't be that much of an issue to you can it? Otherwise you'd be prepared to take your money elsewhere so stop moaning. It's your own fault if you choose to keep your money in a low paying account when there are plenty of better paying alternatives available.

Savers are not getting ripped off. Those who actively look for better savings rates and are prepared to move their money every now and then earn a higher rate of interest than those who can't be bothered to review their savings options regularly. This seems fair enough to me.

Its not that I cant be bothered, but have much more over the 85K safety net; Barclays is much more stable than Virgin Money - if I were to transfer I'd have to transfer it all there. However, I am reluctant too incase they fail. I know Barclays could fail but they seem in a much stronger position than Virgin Money, who BTW are offering 5.25% saving rates ... if they can do it, I can't see why Barclays can't better their offer at the very least !! 

You don't have to keep all your money with one bank. There are a large range of providers, most of them offering much better rates than Barclays (with the exception of their Rainy Day Saver, which only pays interest on to £5K). If you don't like the 'inconvenience' of having apply for and manage several separate accounts, you could consider a concierge service, such as offered by Raisin, HL, or AJ Bell. You are unlikely to get the best rates through a concierge but still better than Barclays, and you can easily get FSCS protection for all your money. If this isn't an option either for you because you insist on keeping your money all in one bank, that's your choice, and you have to live with the disadvantages, i.e. low rates and exposure of capital above £85k.

Bridlington1

h1n1 said:

Bridlington1 said:

h1n1 said:

For too long, banks have been paying much below the BoE base-rate when it comes to interest for those with savings accounts. When the base-rate is increased, they almost instantly increase APR!
Savers are getting ripped off again... please can MSE put pressure on banks, like Barclay's to increase saving interest rates on par, or not far from, the BoE base-rate !  

Why should MSE put pressure on banks to increase savings interest rates? You're the one who chooses where you keep your savings, nobody forces you to stay with Barclays and as already mentioned there are many accounts on offer that pay 5%+. If you're not happy with the rate of interest you're currently getting on your savings then there are a couple of options:

1. Move your money to a better paying account. It's not difficult, just open a higher paying account and move your money into it.
2. If you can't be bothered to do the above then it can't be that much of an issue to you can it? Otherwise you'd be prepared to take your money elsewhere so stop moaning. It's your own fault if you choose to keep your money in a low paying account when there are plenty of better paying alternatives available.

Savers are not getting ripped off. Those who actively look for better savings rates and are prepared to move their money every now and then earn a higher rate of interest than those who can't be bothered to review their savings options regularly. This seems fair enough to me.

Its not that I cant be bothered, but have much more over the 85K safety net; Barclays is much more stable than Virgin Money - if I were to transfer I'd have to transfer it all there. However, I am reluctant too incase they fail.

First of all if you've more than £85k in savings you could split your savings across multiple providers so that you have no more than £85k in any one banking group, you don't need to keep it all in one place. If anything it's a good idea to avoid having all of your savings in one place regardless of the FSCS limit. If you ever have any issues with Barclays, be it a TSB 2018-style meltdown, a frozen account or whatever then you are going to struggle if all of your savings are with Barclays. By spreading your savings across multiple banks/building societies if one suffers technical issues, you've still got access to some of your money.

h1n1 said:

Bridlington1 said:

h1n1 said:

For too long, banks have been paying much below the BoE base-rate when it comes to interest for those with savings accounts. When the base-rate is increased, they almost instantly increase APR!
Savers are getting ripped off again... please can MSE put pressure on banks, like Barclay's to increase saving interest rates on par, or not far from, the BoE base-rate !  

Why should MSE put pressure on banks to increase savings interest rates? You're the one who chooses where you keep your savings, nobody forces you to stay with Barclays and as already mentioned there are many accounts on offer that pay 5%+. If you're not happy with the rate of interest you're currently getting on your savings then there are a couple of options:

1. Move your money to a better paying account. It's not difficult, just open a higher paying account and move your money into it.
2. If you can't be bothered to do the above then it can't be that much of an issue to you can it? Otherwise you'd be prepared to take your money elsewhere so stop moaning. It's your own fault if you choose to keep your money in a low paying account when there are plenty of better paying alternatives available.

Savers are not getting ripped off. Those who actively look for better savings rates and are prepared to move their money every now and then earn a higher rate of interest than those who can't be bothered to review their savings options regularly. This seems fair enough to me.

who BTW are offering 5.25% saving rates

No one is offering 5.25% easy access on £85k to new customers that I'm aware of, but Ulster currently pay 5.2% on their loyalty saver, which is EA so is pretty close. If you're wanting 5.25%+ there's still some notice accounts (First Save and Vanquis) which pay 5.4%. See:
https://moneyfactscompare.co.uk/savings-accounts/easy-access-savings-accounts/?quick-links-first=false
https://moneyfactscompare.co.uk/savings-accounts/best-notice-accounts/?quick-links-first=false

This is before you take into account regular savers, which can pay as high as 8% (though these are very restricted with regards to how much you can deposit each month) and other loss leaders such as Santander's Edge Saver, which pays 7% on balances of £4k or less.

h1n1 said:

Bridlington1 said:

h1n1 said:

For too long, banks have been paying much below the BoE base-rate when it comes to interest for those with savings accounts. When the base-rate is increased, they almost instantly increase APR!
Savers are getting ripped off again... please can MSE put pressure on banks, like Barclay's to increase saving interest rates on par, or not far from, the BoE base-rate !  

Why should MSE put pressure on banks to increase savings interest rates? You're the one who chooses where you keep your savings, nobody forces you to stay with Barclays and as already mentioned there are many accounts on offer that pay 5%+. If you're not happy with the rate of interest you're currently getting on your savings then there are a couple of options:

1. Move your money to a better paying account. It's not difficult, just open a higher paying account and move your money into it.
2. If you can't be bothered to do the above then it can't be that much of an issue to you can it? Otherwise you'd be prepared to take your money elsewhere so stop moaning. It's your own fault if you choose to keep your money in a low paying account when there are plenty of better paying alternatives available.

Savers are not getting ripped off. Those who actively look for better savings rates and are prepared to move their money every now and then earn a higher rate of interest than those who can't be bothered to review their savings options regularly. This seems fair enough to me.

if they can do it, I can't see why Barclays can't better their offer at the very least !! 

Flipping your question the other way round, if Barclays can attract enough money by offering a mere 1.16% on their Everyday Saver, why would they want to increase their savings rate? If more people were to move their savings from Barclays to a higher rate they might think about increasing their EA savings rate to attract more funds.

I've provided links which list the top paying EA and notice accounts above, you can find other types of accounts listed on moneyfacts too. If you want 5.2%+ on your savings I can't see why you can't open some of these accounts and transfer your funds across to them. 

friolento

Bridlington1 said:

 No one is offering 5.25% easy access on £85k to new customers that I'm aware of,

Going by @h1n1's other thread, they are talking about the 1-year Virgin ISA

Middle_of_the_Road

Most of us on here have numerous savings accounts and many also have multiple current accounts. It's really not a good idea to have all your funds with one bank. If there's a problem with the banks IT systems making access unavailable, or they block your account for any reason, it's best to have access to other accounts. 

Stability of banks should not be anything to be concerned about, and if you are, you should not have more than the protected £85k with ANY bank. 

Moving money between savings accounts is very simple, once you have a few opened and running, and with these providers continuing to change there rates, it IS what you have to do if you want to maintain the best interest rate over a longer period.

Many savings providers HAVE been good at passing on the increase as the base rate increased, and it has lead to competition to attract our deposits. The big banks never tend to have great savings rates, but most do have decent "Regular Saving"  accounts that have very good rates, and  if you are prepared to open a few of these, you will make good returns for your efforts. No one bank is going to do everything you would like, you have to work at it to maximise your profits.

Regular savings accounts 2024: Earn up to 8% (moneysavingexpert.com)

friolento

Middle_of_the_Road said:

 
Stability of banks should not be anything to be concerned about, and if you are, you should not have more than the protected £85k with ANY bank. 
 

This reminds me of "banks are safe as houses", an often used phrase before 2007. Then there was some event and people stopped saying it.

Why push your luck when it is so simple to keep within the FSCS limit?

boingy

I'm quite enjoying this period of relative stability where rates are concerned. Until a few months back it was crazy - I was moving big chunks of savings every month or so to keep up with the best rates. And we all know what a pain it is to move big chunks of money around these days. Moving the money takes 10 seconds in an app and a hour on the phone to persuade the bank that we're allowed to move our own money to another of our accounts.

TheWoodler

subjecttocontract said:

Following your post I checked my savings. I have over 60% (£400K) earning over 5%. I consider that to be OK when base rates are 5.25%.

Yes - not quite 60%, I haven’t totted them up but probably about 40%, with the remainder 4%+ plus fixes coming to an end this year and taken out when those were good rates.

I haven’t got anything below 4% other than token sums held for continuity and ease of access with certain providers, eg NS&I Direct Saver.

MSE does sometimes champion issues on behalf of the consumer, but this isn’t one of them when there are still easy access accounts at the 5% mark. 

You’re never going to get top rates from the big boys on the High Street except for limited loss-leading outliers like the Barclays Blue Rewards at 5% mentioned upthread.

What MSE does, and does well, in common with other consumer sites out there, such as Moneyfacts, is to showcase best buys, ably supported by the alert and knowledgeable members on this forum, to whom I and many others are very grateful for truffling out and sharing good deals.

The FSCS limit applies to all banks and building societies with a licence to operate in the UK. That should give you confidence to do your own research. Maybe start small with big names in the building society market and then expand to challenger banks, for example. Loyalty often pays with them as they often offer very good rates on certain types of accounts, usually for members who’ve been with them for at least a year.

 Put your money in a ladder of different accounts with different providers maturing at different times, with a mix of different types of accounts, easy access, fixed bonds, regular savers and so on. That means you have regular access to your cash if needed, and diversify your savings portfolio. 

. . . and it’s interesting and it’s fun to do. Good luck with your savings journey! 

Bazzalona13295

Unfortunately its the way of the world, its how banks make a profit, they will always react slowly to rate hikes with regard to savings but quickly with mortgage rates, reverse that for rate cuts.

There are so many options for your money though, if it means splitting it into numerous pots do it.

ISAs, bonds, 1-3 year fixes, regular savers, easy access.

Always a way.

lr1277

I have said this once before but think it bears repeating. Also mentioned by other posters on this thread.

Say 30 years ago I heard about a rule for bank managers and the rule probably applied maybe 20 years earlier (i.e. before the big bang in the City).

It was the 3-6-3 Rule.

Offer your savers 3%

Charge your mortgagees and lendees 6%

Be  on the golf course by 3pm.

That 3% dfference is how banks used to make money. Then the financial crash in 2008, with rates down to was it 0.25% or 0.5%?

The difference between the savings rate and the lending rate wasn't enough to allow the banks to make enough money to run their operations, so they started to cut costs.

Anyway we are here now.

I thought I would look at the mortgages rates for Ulster bank as they are offering 5.2% to savers in certain circumstances.

I attempted to create a dummy mortgage, which wasn't easy without giving personal details.

But there is some text at the bottom of the screen about fixed rates and tracker rates.

Fixed rates start at about 5.4%. But after the fix ends, they revert to 8%+.So a potential difference of 2.5%.

For their tracker rate, it is at 0.14% above Nat West's base rate of 5.25%. So a mortgage rate of 5.39%. So a difference of 0.19% between borrowers and savers.

Lets say 0.2% for ease of calculation.

So if Ulster bank lend £1M, they stand to make £2000 every year, not including defaults and other complications.

I suspect that is not enough to run a bank. Would you accept £2000 return on a £1M investment at current BoE base rates?

Just saying for savings rates to go up so would mortgage rates.

Edited to tweak a couple of words.

2nd edit: Look at the banks and building societies mortgage and savings rates. If there isn't at least 2-2.5% difference would you invest in them? Would you consider them a 'strong' institution?

And institutions that make money in other ways like car finance etc or they don't evey say how they make their money, I certainly wouldn't trust them.

Middle_of_the_Road

friolento said:

Middle_of_the_Road said:

 
Stability of banks should not be anything to be concerned about, and if you are, you should not have more than the protected £85k with ANY bank. 
 

This reminds me of "banks are safe as houses", an often used phrase before 2007. Then there was some event and people stopped saying it.

Why push your luck when it is so simple to keep within the FSCS limit?

Yes, of course. I should have been clearer. Not wise to go above the 85k, but the chance of a major bank failing seems quite unlikely. It was a different situation pre-2008, but still a risk if only minimal. And how safe are houses anyhow