Savers still missing out after August’s base rate rise, Which? finds

Around two-thirds of instant access variable savings accounts have failed to see any benefit so far from last month’s interest rate rise, analysis from Which? has found.

The consumer group found evidence of “double standards” after monitoring how banks and building societies reacted in the month after August 2 – when the Bank of England increased the base rate by 0.25 percentage points to 0.75%.

It said there had been a trend of a significant amount of standard variable mortgage rates being hiked, while the equivalent benefits were largely denied to savers at the same time.

Half (48%) of providers had raised their standard variable mortgage rates by the full 0.25%.

Meanwhile, one in six (16%) instant access variable savings accounts saw a rise of 0.25% or more. And two-thirds (66%) of those accounts saw no rate increase at all.

For cash Isas, the picture was similarly bleak, with just over one in seven (14%) instant-access accounts passing on a rise of 0.25% or more.

More than two-thirds (68%) of cash Isa accounts saw no rate increase, according to the data sourced by Which? from website Moneyfacts.

The findings cover the time period August 2 to September 3.

Which? also found that, among 37 providers which raised their standard variable mortgage rate by the full 0.25% that also offer relevant savings accounts, eight showed “double standards” by not passing on the equivalent rise to savers.

Which? said it had found a similar pattern of providers hiking mortgage rates but not savings rates at the same time, following the previous base rate rise in November 2017.

Gareth Shaw, a money expert at Which?, said: “A significant number of providers have hiked their standard variable mortgage rates, while the equivalent rise has been largely denied to savers.”

He continued: “If some providers are going to raise their mortgage rates then they should reward savers at the same time, otherwise their customers are being penalised. With future rises expected, we want to see fairness across the board.”

A UK Finance spokeswoman said: “Last month’s rate rise will impact businesses and consumers in different ways depending on the nature of the lending and savings products they hold.

“Banks have made it easier for customers to shop around to get the best deal for them, including clearer communications about the rates they receive, faster cash Isa transfers and stronger customer prompts before a rate is reduced.

“Any customers looking for a better rate should always shop around to look for the best deals on offer.”