FCA sets out action plan in crack down on savings rates
- On August 2, 2023
- By GrowthInvest Marketing
The Financial Conduct Authority has set out a 14-point action plan to ensure banks and building societies are passing on interest rate rises to savers, as the consumer duty comes into effect.
The plan, published this morning (July 31), aims to ensure that banks are communicating with customers much more effectively and offering them better savings rate deals.
It follows a review of the cash savings market and a roundtable held with banks in early July.
The FCA found that while interest rates on savings accounts have been rising, this has been happening more slowly for easy access accounts.
Between January 2022 and May 2023, nine of the biggest savings providers, on average, only passed through 28 per cent of the base rate rise to their easy access deposits.
Notice and fixed term deposits have seen greater pass through rate rises, with these nine firms passing through 51 per cent over the same period.
There has also been significant variance between firms, with smaller firms offering higher interest rates on average than their larger competitors.
The City watchdog said firms offering the lowest savings rates will be required to justify by the end of August how those rates offer fair value, according to the consumer duty which enters into force today.
If they are unable to do so, the FCA will take action.
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