I vividly remember the day when the Bank of England slashed base rates almost to zero percent in March 2009, at the height of the financial crisis. There was real fury out there, as savers realised the impact on their deposits.
They weren’t to blame for dodgy bankers playing high-risk roulette with other people’s money, and losing.
Yet they were the ones who footed the bill. Their reward for a lifetime of diligently putting money in the bank was close to zero.
In 2013, pressure group Save our Savers reckoned savers lost £220 billion worth of interest in the first four years as a result. That figure must now be in the trillions.
The Bank of England has destroyed retirements. Millions are still suffering. I’ve regularly blasted the BoE for mistreating savers, to no effect.
To make matters worse, it has lavished banks with free money, under the funding for lending (FLS) scheme and variants.
This has driven savings rates even lower, because the big banks just don’t need savers anymore.
The result is that until recently, Barclays, Lloyds, HSBC and NatWest were offering just 0.01 per cent on their easy access savings accounts, used by millions.
An incredible 13 years on, the BoE is finally starting to increase interest rates. They stood at 0.1 percent in December. This week, its monetary policy committee is expected to hike them from 0.75 per cent to one percent.
So what have the big banks done in response? Lloyds, HSBC and NatWest have grudgingly increases their easy access rates to a measly 0.1 percent. Wow, thanks.
Barclays Everyday Saver still pays 0.01 percent, shamefully.
Thankfully, there is more to the savings market than the big, bad banks, otherwise we’d all be stuffed.
There is a swarm of challenger banks out there, desperately trying to make their mark by offering more attractive savings rates.
Rather than simply moaning about their ill-treatment, savers should vote with their feet and see if they can grab themselves a better return.
The current best buy easy access deal, the Chase Saver Account, launched by US bank JP Morgan, pays 1.49 percent.
Incredibly, that is 149 times the rate paid by Barclays Everyday Saver.
Aldermore pays 1.25 percent on easy access, Zopa offers 1.19 percent and Tandem 1.10 percent, according to figures from Moneyfacts.
Instant access cash Isa rates have picked up, too, with Cynergy Bank paying 1.05 percent, while Marcus by Goldman Sachs and Saga both pay one percent.
Listen, I know these aren’t great. Especially with inflation hitting 7 per cent in March. But they’re better than nothing (which is what the big banks are giving you).
You can get a higher return if you are willing to lock your money away for a bit. For example, another challenger, Shawbrook, now pays a fixed rate of 1.96 percent for 12 months.
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United Trust Bank pays a fixed rate of 2.50 percent a year for three years, while PCF gives you 2.75 percent for five years.
Again, these are well below the inflation rate, but at least the challenger banks are giving it a go.
Personally, I wouldn’t lock in for too long. Savings rates could rise even higher as the BoE hikes base rates to battle rampant inflation.
If I’m right, today’s improved rates could quickly look disappointing.
Savers are still right to feel resentful, but at least now they aren’t completely helpless.
If your bank is taking you for granted, fight back by switching to a bank that who does value your money.