Base rate yet to have a significant effect on savers’ rates

The number of accounts paying returns over the base rate has dropped by 77 since the rate rose to 0.5 per cent in November 2017, according to the Moneyfacts UK Savings Trends Treasury Report.

In its release the online publication revealed that 1,297 accounts now pay above the base rate, however, this is five per cent lower than the number of accounts that were offered above base rate interest in 2016.

Figures also show that this is four per cent lower than a month after the last rate cut in August 2016.

In addition, the average return available on easy access accounts is yet to rise above its pre-cut levels and currently stands at 0.49 per cent, compared with 0.54 per cent in August 2016.

Charlotte Nelson, Finance Expert at moneyfacts.co.uk, said: “This indicates that, while the base rate has returned to 0.50 per cent, the savings market has yet to recover from the rate cut almost two years ago.

“These latest figures clearly show that some providers either didn’t pass on the rate rise in November or only increased rates by such a small amount that it had little effect. With the main banks still not requiring savers’ funds, it is unlikely that this is going to change anytime soon.”

In comparison, returns available on fixed-rate bonds have increased for the third month running to reach their highest levels in two years.

“This is predominantly fuelled by challenger banks boosting competition, yet it’ll be little consolation to those who want easy access to their cash,” adds Charlotte.

“Not only will savers have had their hopes dashed as a base rate rise this month was not meant to be, but the news that the last rise failed to result in better rates for most will be an added thorn in their side.”

She anticipates that most active savers, put off by these poor rates will dispose of their accounts and find new sources of investment to increase their returns.

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