Today marks the 3rd year anniversary of the launch of Savingschampion.co.uk. In those 3 years the savings market has changed dramatically. Although some key factors have remained the same, the Bank of England base rate is still at the historic low of 0.50% and savers are still desperate for a decent return, many factors have changed and getting a good return on cash has never been harder.
We launched with a simple aim; to help savers find the best interest rates and stay on the best rates. With access to truly independent, whole of market savings advice we wanted to help all savers, no matter how big or small their savings pot.
The Value of Advice
In the last 3 years, we’ve helped over 400,000 savers and tracked over £600 million in savings, keeping savers fully informed on the whole UK savings market.
We are proud that even in this extraordinarily low interest environment Savingschampion.co.ukhas proved that our advice can really add valuefor our clients.
On average the private clients that use our Concierge Managed Savings Service receive an additional £915 gross per annum (after our fee) for every £100,000 of cash held. Our business clients receive an additional £650 gross per annum (after our fee) for every £100,000 of cash held.
Savingschampion.co.uk advises on personal, business, charity and trust accounts.
The value of advice doesn’t just stop at investments. We’ve proved that even in this record low interest rate environment, our advice adds value to savers, in most cases adding thousands of pounds of extra interest.
When we launched the business back in 2011, we believed things were hard for savers with best buy rates of over 3% easily achievable, little did we know that much worse was to come. At the time when providers rarely cut rates on existing savings accounts outside a Bank of England base rate change, without a huge backlash in the media; however it’s now so common for them to do so that it’s almost become the norm. Only a handful of providers have not cut rates including Metro and SAGA out of the 127 providers on the market.
There is now little correlation between the Bank of England base rate and savings rates so when rates do eventually rise, how much will savers really benefit?. That fate is now in the provider’s hands and not the Bank of England’s.
How the savings market has changed
Best Easy Access
November 2011 - Coventry Poppy Online Saver 2 - 3.15%
November 2012 - Ulster Bank Direct Saver – 2.65%
November 2013 - BM Savings Online Reward Issue 4 – 1.70%
November 2014 - Saga Internet Saver (issue 16) – 1.55%
Best Notice Account
November 2011 - Aldermore 120 Day Notice Account – 3.20%
November 2012 - Investec High 5 Issue 2 – 2.79%
November 2013 - Shawbrook 120 Day Notice Account – 1.80%
November 2014 - Shawbrook 120 Day Notice Account – 1.75%
Best Variable Rate ISA
November 2011 - Northern Rock Online E-ISA (Easy Access) – 3.05%
November 2012 - Coventry 60 Day Notice ISA (60 day notice) – 3.25%
November 2013 - Post Office Premier Cash ISA (Easy Access) – 1.80%
November 2014 - Hinckley & Rugby 120 Day Notice Cash ISA Issue 2 – 1.75%
The SavingsChampion.co.uk Savings Index looks at the top 5 best buy easy access accounts.
No savers were immune from potential rate cuts as existing savings rates came crashing down
It started as a trickle, and then came the flood of cuts to existing savings rate cuts. Within months of the launch of the Funding for Lending scheme, providers started to slash the rates for existing, loyal savers, with thousands of existing accounts seeing a cut in their rate, in many cases multiple times.
The table above shows how many savings accounts have seen rate cuts for existing account holders each month.
CPI not RPI
As RPI disappeared from the monthly statistics, the CPI measure became the key index to monitor the real value of the pounds in your pocket. But see how things have changed and how these compare to the best rates above;
November 2011 – CPI = 5.00% (number of accounts to match/beat inflation = 0)
November 2012 – CPI = 2.70% (number of accounts to match/beat inflation = 49)
November 2013 – CPI = 2.20% (number of accounts to match/beat inflation = 39)
November 2014 – CPI = 1.30% (number of accounts to match/beat inflation = 345)
Note: the above rates are October figures announced in November.
Although the picture looks brighter for savers as inflation has come down, inflation is a bit of red herring, especially for those savers who depend on the interest they earn. It’s about pounds their pocket and for some this has halved, whilst the cost of living continues to increase just at a slower rate.
* On average the private clients that use our Concierge Managed Savings Service receive an additional £915 gross per annum (after our fee) for every £100,000 of cash held. Our business clients receive an additional £650 gross per annum (after our fee) for every £100,000 of cash held.