Savers are earning less than half the interest they received the last time the Bank of England base rate stood at 3 per cent.
Research for The Mail on Sunday by data scrutineer Moneyfacts reveals that in the aftermath of the 0.75 percentage point hike on Thursday, the average instant access saver is earning a paltry 1.16 per cent a year in interest.
In contrast, when the base rate was at 3 per cent in November 2008, the average rate was 3.63 per cent.
Pain: When the base rate was at 3 per cent in November 2008, the average rate was 3.63 per cent
Although rates may increase in the next few days, the likes of Santander and Barclays are paying interest of just 0.2 and 0.25 per cent respectively on £10,000 in ‘everyday saver’ accounts.
In contrast, a saver can earn 2.5 per cent on an instant access account with Saga.
Moneyfacts’ Rachel Springall says: ‘High street banks are failing to pass on base rate rises to savers. It’s disappointing given the stress many households’ finances are under.’
Anna Bowes, co-founder of Savings Champion, says: ‘Following the eighth consecutive interest rate increase by the Bank of England, a momentum for savings rates to go up has finally been created.’
RCI Bank is paying 4.6 per cent on a one-year fixed-rate bond while Lloyds Bank is offering 5.25 per cent on a one-year Club Lloyds Monthly Saver Account, subject to a maximum saving of £400 a month.
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