Public fury as banks fail to pass on higher interest rates to savers | Personal finance | Finance

Lenders reacted immediately to hit holders of variable or tracker mortgages with higher fees, but are dragging their feet to reward savers, critics say.

Only two have announced better returns on savings accounts…but they won’t launch for weeks. Conservative leadership candidate Liz Truss backed savers last night.

His campaign said: ‘The Bank of England has taken the decision to raise interest rates to 1.75% in an attempt to tackle inflation.

“Banks should pass on any interest increases so that people who work hard and have savings can have more money in their pockets. Her team added, “Liz will be watching the actions of the banks carefully.”

Meanwhile, homeowners with a NatWest mortgage will pay an increase of 1.15 percentage points on its standard variable rate. But Instant Saver account holders get an increase of just 0.19 points to 0.2%.

Barclays also passed the entire hike on to borrowers, but Everyday Saver customers get a paltry 0.01%.

Only the Newcastle Building Society, which will pass on the full base rate hike to the majority of savers from August 25, and Santander which will raise rates on some accounts from September 1, have taken over.

Stuart Powell of Ocean Mortgages said: ‘If a bank were to break that mold and increase their savings rates on the first of the following month by the same amount as the bank change, they would likely gain a lot of new customers and would keep their existing ones happy.

Scott Gallacher, of financial planners Rowley Turton, said: “Whether it’s the billions languishing in accounts paying almost no interest or the PPI mis-selling scandal, the banks’ business model seems to be based on processing unfair to customers.”

In recent years, savers, who far outnumber mortgage owners, have seen their nest egg eroded by historically low interest rates, as well as soaring inflation this year.

Bank of England Governor Andrew Bailey said the average easy-access savings account had risen just 0.3 percentage points since November, despite the bank rate rising almost four times as high .



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