- 21st November marked the 2nd anniversary of Savings Champion
- Savings rates have almost halved in that time, while base rate remains the same
- But it’s lack of competition, not the base rate, which has driven interest rates down
Our two year anniversary has us in a reflective mood as we look back on how the savings market has changed and of course at those things that haven’t. While the Bank of England base rate has remained static at a record low of 0.50%, interest rates on best buys have crashed down to shockingly low levels following the government’s launch of the funding for lending scheme (FLS).
Some things look to have improved however; inflation is the savers’ silent assassin, but strangely although interest rates were much higher two years ago, inflation was more than double what it is today. So in real terms savers are now actually better off, although you’d be forgiven for not feeling it.
Launching the business was a simple idea based on a simple concept; to monitor and track all UK based savings rates so savers can get the best rates and stay on the best rates.
However even we couldn’t have anticipated just how important our Rate Tracker service would be. The last 12 months have seen an unprecedented number of savings rate changes, without a base rate change, with thousands of our users notified of changes to their accounts.
Rate Tracker users are fully informed, so it’s probably no surprise they are receiving more than double the interest paid by the average easy access account *
And for those who are looking for the elite fully managed service, for a small fee our Concierge Service has helped open, monitor and manage millions of pounds, helping those clients to earn triple the interest of the average savings account. In addition we help our customers to ensure they can be fully protected by the UK Financial Services Compensation Scheme or equivalent.
How rates have fallen!
Back in November 2011 best buys rates were offering double the interest that they are paying today, leaving many savers is serious dire straits.
Best Easy Access
2011 - Coventry Poppy Online Saver 2 - 3.15%
2012 – Ulster Bank Direct Saver – 2.65%
2013 - BM Savings Online Reward Issue 4 – 1.70%
Best Notice Account
2011 - Aldermore 120 Day Notice Account – 3.20%
2012 – Investec High 5 Issue 2 – 2.79%
2013 - Shawbrook 120 Day Notice Account – 1.80%
Best Variable Rate ISA
2011 – Northern Rock Online E-ISA (Easy Access) – 3.05%
2012 – Coventry 60 Day Notice ISA (60 day notice) – 3.25%
2013 – Post Office Premier Cash ISA (Easy Access) – 1.80%
But CPI has fallen too
CPI is the main measure of inflation to monitor the real value of the pounds in your pocket, but how have things changed and how do these rates compare to the best rates above;
October 2011 – CPI = 5.00% (number of accounts to match/beat inflation = 0)
October 2012 – CPI = 2.70% (number of accounts to match/beat inflation = 49)
October 2013 – CPI = 2.20% (number of accounts to match/beat inflation = 39)
Relentless cuts for existing Savers
As first the FLS, then forward guidance indicated that there would be an even longer wait for the base rate to rise, unfortunately providers seemed to take these announcements as a green light to cut the rates on hundreds of accounts – piling on even more pain to the beleaguered saver.
Over the last three months alone there have been almost 500 rate cut announcements. With so many rates falling, it makes our Rate Tracker and Concierge services even more vital to help savers.
- 0.52% - average available easy access account
- 1.16% - average rate tracker users easy access account
- 1.57% - average concierge users easy access account