The bosses of the country’s four main lenders are facing pressure to raise “measly” easy access savings rates.
The Treasury Committee of MPs said it had written to the chief executives of NatWest, Lloyds, HSBC UK and Barclays to demand that savers are fairly rewarded.
Lenders have been accused of being quick to reflect Bank of England rate hikes in their borrowing costs – hurting the likes of mortgage holders – but acting slowly to pass on rate rises to those able to squirrel away some cash as the cost of living crisis evolves.
The letter to bank bosses asks if they believe all their savings rates provide “fair value” to customers and whether customer inertia is being exploited.
It effectively questions whether they would currently comply with the new consumer duty rules, due to kick in at the end of the month.
The change in the regulatory demands of lenders forces them to put consumers at the heart of what they do.
Treasury committee chair, Harriett Baldwin, said: “With interest rates on the rise and our constituents feeling squeezed by rising prices, it is only right that the UK’s biggest banks step up their measly easy access savings rates.”
She told Sky’s Business Live with Ian King that the major lenders were taking advantage of people such as the elderly who needed high street services.
“For our constituents who are, perhaps, not comfortable with internet banking… we think that these customers are being particularly badly treated,” she said.
Another member, Labour’s Dame Angela Eagle, said: “In the middle of a cost-of-living crisis, the high street banks are squeezing higher profits from their loyal savings customers.”
After 13 consecutive increases, bank rate – the UK’s base-level interest rate – currently stands at 5%.
The average two-year homeowner mortgage rate on the market is 6.42%, according to data from financial information website Moneyfactscompare.co.uk.
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It had stood at a level closer to 2.5% before the Bank of England’s cycle of rate rises began in December 2021.
The data showed that the average easy access savings rate on the market currently stood at 2.43%.
Savers looking for a one-year fixed-rate account, however, can get 4.82% typically.
Chancellor Jeremy Hunt issued a similar plea for banks to pass on rates to savers last month after securing an agreement on the help being offered to mortgage-holders.
Bank of England data last week showed a record net sum withdrawn from savings accounts during May as households continue to struggle amid stubborn inflation.
The banking sector, which has stepped up the pace of rate hikes for savings products in recent months, has urged consumers to shop around for deals that suit them best.