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Lloyds, NatWest, Barclays slammed again over poor savings rates

Published 20/02/2024, 13:15
Updated 20/02/2024, 13:15
© Reuters.  Lloyds, NatWest, Barclays slammed again over poor savings rates

Proactive Investors - Large UK lenders have been criticized once again for offering low rates on their easy access savings accounts.

According to Moneyfacts, Barclays (LON:BARC), HSBC Holdings (LON:HSBA), Lloyds Banking Group (LON:LLOY), NatWest Group PLC (LON:NWG), and Banco Santander (BME:SAN) all offer gross rates of below 2% on savings worth £10,000 in flexible accounts.

“Despite the continued focus on passing on interest rates to savers, the big five banks are still yet to make their easy access rates more competitive in relation to the rest of the market,” Moneyfacts spokesperson James Hyde said.

This comes after lenders were criticized last year for raising mortgage rates faster than they were increasing rates for savers, as the base interest rate rose to 5.25%.

Banks profited as a result, as the margin widened between inflows from interest on loans and mortgages and outflows from interest paid on savings accounts.

Barclays reported a 9% increase in the net interest income of its retail division to £6.4 billion over the year to December on Tuesday, as margins rose from 2.86% to 3.13%.

NatWest reported an improvement in margins from 2.85% to 3.04% last week meanwhile, which aided a 12% jump in net interest income to slightly over £11 billion.

Both government officials and regulators had questioned the industry over growing margins last year, with rules requiring companies to act in consumers' interests being introduced around the same time.

“The Financial Conduct Authority’s regulations around Consumer Duty are directing financial services institutions to offer fair value,” Hyde added.

“The big banks are still failing in some areas to meet those expectations.”

Each bank was approached for comment.

Read more on Proactive Investors UK

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