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There’s nothing like sensible savings advice

No, this is not the old joke that the Financial Conduct Authority’s recent wisdom is nothing like sensible savings advice. Far from it, actually.

It’s just that it’s not very new.

Even though base interest rates may be rising after many years in the doldrums, they will remain at relatively low levels for some time to come.

It therefore makes sense to shop around for a good rate.

The regulator this week hinted that it could step in to force banks and other providers to set a minimum interest rate after it was revealed (to no-one’s surprise) that savers who stay with the same provider for a long time, sometimes get poor returns on their money.

Some banks, according to the BBC’s analysis, pay just 0.05 per cent a year on instant access savings.
The FCA is considering an idea to impose a Basic Savings Rate which would automatically apply after an account has been open for a period of time, say one year. It said customers who do not shop around should be treated fairly. We agree.

The FCA said the total amount long-term savers could be losing by not seeking out top-ranked savings accounts was £480m and that they could gain an average extra 0.82 per cent interest a year by switching. Citizens Advice says the average amount the average saver losing every year by not switching was £48.

Despite many efforts over the years to encourage savers to do so (including naming and shaming the worst offenders), the regulator’s advice on switching has fallen largely upon deaf ears among the saving public, it said.
Some say common sense might dictate this is not necessarily a good idea because it could encourage unscrupulous or cynical providers (surely not, Ed?) to offer rates at the lowest level they can get away with.

There is an old saying about leading a horse to water and while one supposes many don’t switch because they don’t much care to, there is a strong element of fairness in all this. And we at the Family Building Society fully embrace fairness. See for yourself.

Our rates are as competitive as we can make them. And some of our tracker savings accounts, like the Market Tracker Cash ISA ,follow what others are doing to ensure that you are always getting a fair rate. The interest rate on the Market Tracker Saver, for example, is calculated using data from Moneyfacts and pays an average interest rate of the 20 highest gross annual variable interest rates, for an investment of £10,000 from a reference group.
So switch on and switch in.

By Steve McDowell

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Epsom
Surrey KT17 4NL
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