🔔 The Bank of England base rate rise – the final curtain

Author: Anna Bowes
07th September 2018

After almost of decade of waiting and many years of will they, won’t they, the Bank of England finally raised rates last month and savers breathed a sigh of relief – but that was probably a bit premature.

Base rate update - the final curtain

Fast-forward to today and the outlook is pretty bleak, we’re sad to say. By now we would have expected most, if not all, providers to have announced their plans for their variable rate savings accounts, following the recent rise. These plans should detail each and every one of their variable rate savings products, be they on-sale (available to open today) or off-sale (not available to open).

And we should expect to see those increases coincide with any planned rise to their Standard Variable Mortgage Rate.

Of course, in the past, savings providers have not always played fair. Rates on all accounts generally didn’t always rise by the full amount of the base rate rise but many did and most did at least move all their accounts by something, even if it was by a small margin.

But that was how things used to be, before the financial crisis took hold – the link between the Bank of England base rate and savings rates was strong.

Today the picture is very different. A shocking statistic has emerged as just 63 providers out of 136 have changed some (certainly not all) of their accounts following the rise. This means that 54% of the market have simply not increased ANY of their variable savings rates. And that’s not all. With 50% of all variable rate savings accounts seeing no change in rate following the base rate rise back in November last year, some accounts have remained the same following not just one but two base rate increases.

There are just a handful of providers who have passed on the full rate rise to all savers, which deserve another mention; smaller providers Beverley Building Society, Holmesdale Building Society, Monmouthshire Building Society and Swansea Building Society.  

Of course, you have to look at the rates being paid to make sure you’re getting a good and fair deal but certainly these building societies are treating their customers more fairly.

Ditch the High Street savings providers!

On the flipside, the high street continues to offer some of the worst rates on the market and have done nothing to impress us following the base rate rise.  None of them have raised all their rates and of those that were increased, some were by the smallest margins.

If you take a look at their easy access accounts alone, you can see clearly that you can achieve so much more by moving. The rates before and after the base rate rise are simply appalling. Move your money to the best easy access account on the market, currently with Coventry Building Society, paying 1.40%, and you could pocket almost an extra £1,062.50 in interest over the year on a balance of £85,000. Even on a balance of £10,000 you could earn either £15 over the next 12 months with HSBC, or £140 with Coventry Building Society.

  Rate increase following the base rate New Rate Interest earned based on amount deposited    How much more interest earned on best easy access (1.40%)
Provider/Account Name   AER % £50,000 £85,000   £50,000 £85,000
Lloyds – Easy Saver  None 0.20% £100.00 £170.00   £600.00 £1,020.00
HSBC – Flexible Saver 0.10% 0.15% £75.00 £127.50   £625.00 £1,062.50
NatWest – Instant Saver * 0.10% 0.30% £150.00 £255.00   £550.00 £935.00
Barclays – Everyday Saver * 0.05% 0.30% £150.00 £255.00   £550.00 £935.00
Santander – Everyday Saver 0.10% 0.35% £175.00 £297.50   £525.00 £892.50
Halifax - Everyday Saver None 0.20% £100.00 £170.00   £600.00 £1,020.00
Bank of Scotland - Access Saver None 0.20% £100.00 £170.00   £600.00 £1,020.00
Royal Bank of Scotland - Instant Saver * 0.10% 0.30% £150.00 £255.00   £550.00 £935.00
Nationwide - Instant Access Saver Issue 6 * ** 0% - 0.15% 0.25% £125.00 £212.50   £575.00 £977.50
Best easy access - Coventry Building Society (1.40%) 1.40% £700.00 £1,190.00      
Rates based on £50,000 and £85,000 deposited              
* This is a tiered account. Rate shown based on balance of £50k and £85k.          
** The Loyalty Saver range of easy access accounts will increase by between 0.05% and 0.10%, depending on your loyalty term and pay much better rates than the Instant Access Saver - from between 0.80% for 1 - 4 years to 1.10% for 15 years or more.

But it’s not just the high street savings providers who are behaving badly.  A raft of providers have not even bothered to announce any changes and most of those that have, well quite frankly, could do better.

Here’s a breakdown of the providers that have announced. Has your provider played fair or is it time to show them a clean pair of heels and move your hard-earned cash elsewhere. We suspect for many savers it’s the latter! So, make the switch. Check out our Best Buy tables for some inspiration.

Provider Did all  Rates Change Lowest Increase Highest Increase Average Increase Effective Date(s)
AA - Bank of Ireland Group No 0.15% 0.15% 0.15% 01-Sep
Aldermore No 0.25% 0.25% 0.25% 31-Aug
Allied Irish Bank No 0.05% 0.05% 0.05% 04-Sep
Bank of Cyprus UK No 0.15% 0.15% 0.15% 06-Sep
Bank of Scotland No 0.15% 0.25% 0.22% 31-Aug
Barclays No 0.05% 0.10% 0.07% 03-Sep
Beverley Building Society Yes 0.25% 0.25% 0.25% 28-Aug
C.Hoare & Co No 0.10% 0.25% 0.18% 06-Aug
Cahoot Yes 0.15% 0.15% 0.15% 03-Sep
Cambridge Building Society No 0.05% 0.25% 0.15% 30-Aug
Cater Allen No 0.10% 0.25% 0.20% 31-Aug
Clydesdale Bank No 0.05% 0.25% 0.14% 31-Aug
Co-op Bank No 0.03% 0.25% 0.06% 30-Aug
Coutts & Co No 0.15% 0.25% 0.20% 03-Sep
Coventry Building Society No 0.05% 0.25% 0.17% 01-Sep
Cumberland Building Society Yes 0.15% 0.30% 0.21% 01-Sep
Danske Bank No 0.15% 0.25% 0.22% 03-Sep
First Direct No 0.05% 0.10% 0.09% 03-Sep
First Trust Bank No 0.05% 0.30% 0.19% 04-Sep
Furness Building Society No 0.10% 0.25% 0.19% 01-Sep
Gatehouse Bank No 0.25% 0.25% 0.25% 17-Aug
Halifax No 0.25% 0.25% 0.25% 31-Aug
Hampden & Co Yes 0.15% 0.25% 0.18% 17-Aug / 20-Nov
Hanley Economic Building Society Yes 0.10% 0.15% 0.14% 01-Sep
Hinckley and Rugby Building Society No 0.10% 0.30% 0.13% 29-Aug
Holmesdale Building Society Yes 0.25% 0.25% 0.25% 01-Sep
HSBC No 0.05% 0.25% 0.15% 03-Sep
Kent Reliance No 0.04% 0.35% 0.21% 01-Sep
Kingdom Bank No 0.10% 0.10% 0.10% 03-Aug
Lloyds Bank No 0.15% 0.25% 0.20% 31-Aug
Manchester Building Society Yes 0.10% 0.25% 0.17% 01-Sep
Marsden Building Society No 0.10% 0.50% 0.21% 01-Oct
Metro Bank No 0.10% 0.25% 0.16% 31-Aug
Monmouthshire Building Society Yes 0.25% 0.25% 0.25% 01-Sep
National Counties Building Society No 0.03% 0.25% 0.14% 11-Sep
National Savings & Investments No 0.05% 0.15% 0.10% 01-Oct
Nationwide Building Society No 0.05% 0.25%* 0.10% 31-Aug
Natwest No 0.05% 0.25%>^ 0.16% 03-Sep
Newbury Building Society No 0.10% 0.25% 0.17% 13-Sep
Paragon Bank No 0.10% 0.26% 0.21% 31-Aug
Penrith Building Society No 0.20% 0.25% 0.24% 01-Sep
Post Office No 0.15% 0.25% 0.16% 01-Sep
Progressive Building Society No 0.10% 0.25% 0.19% 10-Sep
Royal Bank of Scotland No 0.05% 0.20% 0.10% 03-Sep
Saffron Building Society No 0.10% 0.30% 0.24% 31-Aug
Sainsbury's Bank No 0.07% 0.25% 0.16% 05-Sep
Santander No 0.10% 0.25% 0.18% 03-Sep
Scottish Building Society Yes 0.10% 0.20%~ 0.20% 17-Sep
Scottish Widows Bank No 0.25% 0.25% 0.25% 31-Aug
Skipton Building Society No 0.05% 0.30% 0.16% 16-Aug  / 31-Aug
Smile Yes 0.13% 0.28% 0.21% 30-Aug
Stafford Railway Building Society Yes 0.10% 0.25% 0.17% 01-Oct
Swansea Building Society Yes 0.25% 0.25% 0.25% 01-Oct
Teachers Building Society Yes 0.10% 0.25% 0.15% 01-Sep
The Access Bank Yes 0.20% 0.20% 0.20% 01-Sep
The Family Building Society No 0.10% 0.25% 0.19% 11-Sep
Triodos Bank No 0.05% 0.25% 0.09% 03-Sep
TSB Bank No 0.10% 0.25% 0.12% 01-Sep
Ulster Bank No 0.10% 0.10%> 0.11% 03-Sep
United Trust Bank No 0.25% 0.25% 0.25% 08-Aug
Vernon Building Society Yes 0.05% 0.25% 0.22% 01-Sep
Virgin Money No 0.25% 0.25% 0.25% 01-Sep
Yorkshire Bank No 0.05% 0.25% 0.14% 31-Aug
*Help to Buy ISA will increase by 0.50% to 2.50%        
>Help to Buy ISA will increase by 0.49% to 2.47%        
^Regular Saver will increase by 0.50% to 1.50%        
~Regular Saver will increase by 0.40% to 2.00%        

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