Nationwide and TSB won't pass full interest rate rise on to savers - MSE News

2»

Comments

  • Uxb
    Uxb Posts: 1,340 Forumite
    bristolleedsfan wrote: »
    If my memory serves me correct many years ago when Base Rates regularly increased by 0.50%, Savings rates tended to go up mostly by 0.25%

    Ah yes but those like you and me with long memories are not considered "relevant" anymore.
    Even further back were the days when the BofE changed rates and some weeks later the Building Societies Association would announce what their new rate would be and ALL the societies then changed it to the agreed value on the same day: Competition? zero.
  • bristolleedsfan
    bristolleedsfan Posts: 12,084 Forumite
    First Post Name Dropper First Anniversary Photogenic
    Uxb wrote: »
    .
    Even further back were the days when the BofE changed rates and some weeks later the Building Societies Association would announce what their new rate would be and ALL the societies then changed it to the agreed value on the same day: Competition? zero.


    Yes operated like a Cartel.


    Same thing happening now via a different method, a few announce as per O/P others will just play Copy Cat
  • bowlhead99
    bowlhead99 Posts: 12,295 Forumite
    Name Dropper First Post First Anniversary Post of the Month
    surreysaver wrote: »
    Its 0.25%. 0.25% of s0d all is s0d all. Is there any point in worrying about it?
    Maybe there are some people with more than sod all in their accounts, so that a quarter percentage point rise would be more noticeable amount of money than it is for you with your sod all in your accounts? (£25 per £10k).

    We're not talking about the interest rate changing by 0.25% of the existing interest rate (i.e. next to nothing). The article is talking about the rate going upwards so that if 'passed on' in full, it would increase your annual interest by 0.25% of all the money you have in your acount.... which is nothing to do with whether the banks are paying high rates or 's0d all' at the moment....
  • JuicyJesus
    JuicyJesus Posts: 3,830 Forumite
    First Anniversary Combo Breaker First Post
    Profit seeking enterprises seek to make profit. Also, Pope found attending mass.
    urs sinserly,
    ~~joosy jeezus~~
  • apt
    apt Posts: 3,188 Forumite
    Name Dropper First Post First Anniversary
    JuicyJesus wrote: »
    Profit seeking enterprises seek to make profit. Also, Pope found attending mass.

    Mutual building societies are supposed to serve their members, most of whom are savers, not to maximize profits and Board/executive pay.
  • Thrugelmir
    Thrugelmir Posts: 89,546 Forumite
    Name Dropper Photogenic First Anniversary First Post
    apt wrote: »
    Mutual building societies are supposed to serve their members, most of whom are savers, not to maximize profits and Board/executive pay.

    Profits have been falling. One reason why the number of mutual organisations is in decline.
  • Money_Grabber13579
    Money_Grabber13579 Posts: 4,258 Forumite
    Newshound! Name Dropper Combo Breaker First Post
    If I understand what Nationwide are saying correctly, it seems that a large majority of their mortgage holders are on fixed rate deals where the interest rate can!!!8217;t be raised. How ever the majority of savers are on variable rate products where the rates can be raised.

    However, if they can!!!8217;t generate the extra income from the base rate rise on mortgages, they can!!!8217;t pay out loads more money to savers.

    I!!!8217;m not going to say that I like it, but just seems to be a fact of the current market environment.
    Northern Ireland club member No 382 :j
  • realaledrinker
    realaledrinker Posts: 1,661 Forumite
    Combo Breaker First Post First Anniversary I've been Money Tipped!
    edited 9 August 2018 at 1:15AM
    When interest rates are near zero, banks struggle to make money from interest & fees alone. Rates payable & receivable are not that far apart. As a result they look to make savings elsewhere by slashing Head Office staffing levels and closing branches and borrow cheap money from the Bank of England.

    In the early 90s I was paying 15% percent on my mortgage and I can't remember the average savings rate but it would've been much less than half that - I remember getting giddy with excitement at the end of that decade when the Smile ISA paid 7.25%

    So when rates increase Banks will seek to recover some of that margin. That's how it works, from a 15 year senior Bank employee. If not happy, move banks or put your savings into stocks and shares and ride the wave with The Donald and Brexit.
    Ethical moneysaver
This discussion has been closed.
★ ★ ★ Meet your Ambassadors

Categories

  • All Categories
  • 343.1K Banking & Borrowing
  • 250.1K Reduce Debt & Boost Income
  • 449.7K Spending & Discounts
  • 235.2K Work, Benefits & Business
  • 607.9K Mortgages, Homes & Bills
  • 173K Life & Family
  • 247.8K Travel & Transport
  • 1.5M Hobbies & Leisure
  • 15.9K Discuss & Feedback
  • 15.1K Coronavirus Support Boards