‘Scale challenger’ banks respond to Treasury Committee on savings rates

The Treasury Committee last month expanded its campaign for banks to increase savings rates offered to loyal customers, questioning why easy access savings rates are much lower than the current BoE base rate. The Committee has now published responses from Nationwide, Santander, TSB and Virgin Money – the ‘scale challengers’ which account for a quarter of all personal current accounts. It has asked how these institutions determine the level of interest rate increases to pass on to savers, and whether they inform their loyal customers that higher alternatives may be available.

The campaign was expanded in mid-May, at which point the ‘scale challenger’ banks offered interest rates between 0.25% and 1.25%.

The responses of the big four banks – Barclays, HSBC, Lloyds and NatWest – were published earlier in March. When the enquiry began in February, these banks offered between 0.5% and 0.65% for easy access savings. They now offer rates between 0.7% and 1.35%, compared to the BoE base rate of 4.5%.