More than £400 billion is sitting in savings accounts paying next to nothing, says Paragon, and savings experts are urging customers to fight back. The Barclays Everyday Saver pays 0.01 percent on balances below £50,000, or 0.10 percent on more than £50,000.
The bank’s instant cash Isa pays 0.3 percent, while its Blue Rewards Saver pays 1 percent.
A Barclays spokesperson said: “We regularly review our savings product rates and proactively communicate to customers to make them aware of the best savings rates available.”
HSBC said it has increased rates on its Flexible Savings and Premier Savings accounts from 0.01 percent in February to 0.20 percent, adding: “Our Online Bonus Saver account offers rates of up to 1.30 percent, up from 0.05 per cent before March 1.”
Rates on the Lloyds Easy Saver have climbed but only to 0.2 percent, while the NatWest Instant Saver rate will double from 0.1 per cent to 0.2 percent, from August 1.
A NatWest spokesperson said: “Our Digital Regular Saver account offers an interest rate of 3.25 percent.”
MoneyComms.co.uk personal finance expert Andrew Hagger said big-bank savings rates have barely moved even though the Bank of England has lifted the base rate five times in a row, from 0.1 percent to 1.25 percent since December: “It is staggering that the Barclays Everyday Saver still offers such a paltry return.”
He said savers can earn up to 150 times as much interest with best-buy easy access savings rates at the moment and tips Shawbrook Bank, which pays 1.52 percent, Zopa, which pays 1.50 percent, and Cynergy Bank, which pays 1.46 percent.
Hagger said £20,000 with Barclays Everyday Saver will give you £2 interest in a year, while Shawbrook earns £304: “Accounts can be opened online in minutes, so there is no excuse to put up with derisory rates from the big banks who are making profits at your expense.”
Inflation is forecast to hit 11 percent by October and low rates are only worsening the pain for savers, Anna Bowes, SavingsChampion.co.uk’s founder, said: “Many providers are quick to pass on base rate cuts, but slow when base rates rise.”
Halifax is another one falling behind. “Once popular accounts with promising names such as Liquid Gold, Saver Reward and Bonus Gold are all paying just 0.05 percent,” she added.
Markets expect the Bank of England to hike rates by at least 0.5 percent at its meeting in August, lifting them to 1.75 percent. Bowes said: “It will be interesting to see how the high street banks respond.”