Business & Investment

JEFF PRESTRIDGE: Terrible … how banks treat savers

JEFF PRESTRIDGE: Leading savings experts say the way banks treat savers with a slight rate hike in response to a base interest rate hike is “terrible.”


terrible. This is a major savings expert after Barclays Bank broke the ranks last week and finally pushed up some (but not all) of the savings rate in response to last month’s rise in the bank’s base interest rate to 0.25%. It was a reaction of.

“Terrible” came from the mouth of Anna Bowes, who works for her sins as a co-founder of the Savings Champion, a witness to interest rates, pondering savings rates.

As Anna easily admits, it’s not a particularly enlightening profession at this point, given that most banks and building-and-loan unions are hesitant to pay savers anything but a small amount. Anna often says “terrible” these days, but of course it is.

“Terrible”: Savers are receiving poor profits from the hard-earned cash they have cleared up.

The word wasn’t murmured as Barclays broke the ranks, which is commendable, but delayed against the 0.15 percentage point rise in base interest rates announced on December 16 a month ago. This is because of the frugality of the reaction.

Banks that made £ 2 billion in profits in the third quarter of last year (up from £ 1.1 billion in the same period in 2020) said they had raised the instant cash Isa rate from 0.02 percent to 0.05 percent. Between 0.05 and 0.1 percent.

For savers under £ 30,000 in their accounts, that means an increase of only 0.03 percentage points in the tax-exempt interest they receive.

For every £ 10,000 you save, you’ll get an additional £ 3 per year, which will be £ 5 instead of £ 2 coins. Those with a savings of £ 30,000 will receive an annual interest rate of £ 30 compared to the previous £ 15.

If Barclays passes a full 0.15 percentage point increase in base interest rates (as requested as part of the Give Savers A Rate Rise campaign), equivalent interest payments will be £ 17 and £ 60. There is little total income to please, but it’s not as bad as the average one.

Barclays said it offered its customers

Barclays said it offered its customers “various options to reach their goals.”

Last week, Barclays offered its customers “various options to reach their goals,” especially children’s savings accounts (paying 1.5%) and Isa’s purchasing support (1.25% cents).

What is omitted is that 1.5% will only be paid for balances up to £ 10,000. Beyond that limit, the additional balance will attract 0.01%.

Nor does it mention that the instant access account Everyday Saver continues to pay 0.01% interest on balances of up to £ 10m.

In other words, you have an annual interest rate of £ 1,000 for a savings of £ 10 million. We look forward to what will happen to these savers in the next few days. But there is one thing for sure. Not so many.

Towns and villages need essential community services

The community is at the heart of many of the issues addressed in the email on Sunday’s personal finance page.

While acknowledging the digital world in which we live, we believe that our towns and villages must be vibrant places with access to important community services such as banks, post offices, libraries and pubs. increase.

For example, we have been waving the flag of community-style banks for a long time. Bank branches operated by third parties (usually post offices) are available to all customers of major high street banks.

Community is also a spirit embodied in everything that 1,700 Rotary clubs in the UK and Ireland do.

These clubs are made up of approximately 40,000 members from all disciplines and are committed to improving the community. They voluntarily and regularly raise a lot of money for local charities.

Last Thursday night I had the opportunity to speak at a supper hosted by Reading Abbey Rotary, a club of about 40 energetic individuals.

And it was certainly a privilege when we talked to them about our focus on the community while learning about Reading and the good work they are doing in the area.

They support food banks and raise money through holding events such as 10 km of local real estate events (this is the first way I learned about the club’s existence).

Rotarians are a force for the benefit of the locals. If you want to be one, please visit rotarygbi.org.

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JEFF PRESTRIDGE: Terrible … how banks treat savers

https://www.dailymail.co.uk/money/comment/article-10405681/JEFF-PRESTRIDGE-Awful-way-banks-treating-savers.html?ns_mchannel=rss&ns_campaign=1490&ito=1490 JEFF PRESTRIDGE: Terrible … how banks treat savers

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