FCA launches campaign to steer savers towards better rates

The Financial Conduct Authority has launched a campaign in a bid to boost savings account switching. 

The £600,000 advertising blitz will encourage people to shop around for better savings rates and will be rolled out across radio, and social media, with the aim of highlighting how little time it takes to find a better rate. 

It comes as little more than half of savers said they had switched, or were considering switching, their savings accounts to take advantage better rates than seen in the past decade.

Around two-thirds said they would consider switching savings accounts but have not yet done so. 

Sheldon Mills, executive director of consumers and competition at the FCA, said: ‘We know that people can be put off switching for a variety of reasons, but they could be making their money work harder.

‘There are some great rates out there and it could take as little as five minutes to find a better deal.’

In December, the FCA announced it would crack down on banks and their slowness at passing on base rate rises to easy-access accounts

The watchdog also launched a 14-step plan to ensure that banks and building societies pass on fair value to consumers last year. 

At that time, it found nine of the biggest savings providers only passed on 28 per cent of the base rate rise to their easy-access accounts between January 2022 to May 2023

Under the plan, firms offering the lowest savings rates were required to justify how their rates offer fair value by the end of August 2023 under the Consumer Duty which comes into force today.

The FCA said it has seen signs that the savings market is becoming more competitive, with savers moving their money to take advantage of higher rates.

From July 2023 to December 2023, the amount held in bank and building society no interest accounts dropped by £13billion and in easy-access accounts, which typically have lower interest rates, by £9billion.

Savings held in fixed-term and notice accounts, which often come with higher interest rates, increased by £24billion.

On the other hand, £253billion worth of household savings still sits in accounts paying low or no interest, figures from Coventry Building Society suggest. 

Despite the plan, five of the biggest high street banks are offering savers an average interest rate of just 1.7 per cent based on deposits of £10,000, data from rate scrutineers Moneyfacts compare suggests.

Images from the campaign show how savers can find a better savings account quickly

Barclays, HSBC, LLoyds Bank, NatWest and Santanders’ easy-access accounts all remain in the bottom quartiles of savings best buy tables.

The best easy-access account on the market pays 5.16 per cent by contrast.

The only rate change to these banks’ products in recent months has been from Santander when the interest paid on its easy-access saver from 2.5 per cent to 1.7 per cent.

James Hyde, of Moneyfacts, said: ‘Despite the continued focus on the passing of interest rates onto savers, the big five banks are still yet to make their easy access rates more competitive in relation to the rest of the market.’