Martin Lewis lays out the best savings deals available
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Inflation is on course to top six percent, but Barclays, Halifax, Lloyds, HSBC, Nationwide, NatWest and Santander continue to pay a miserly 0.01 percent to loyal savers on easy access. It’s against the spirit of Christmas.
Last Thursday, the Bank of England shocked markets by increasing base rates from 0.1 percent to 0.25 percent, in a bid to curb inflation.
None of the big high street banks have subsequently made any move to increase savings rates, said Sarah Coles, personal finance analyst at Hargreaves Lansdown.
Yet they were quick to announce mortgage rate hikes, effectively saying “Bah Humbug” to both savers and borrowers.
That is a disastrous return with inflation at 5.1 percent in the year to November and set to top 6 percent in the Spring, according to the Bank of England.
In contrast, they moved at “lightning pace” to announce variable rate mortgage increases, Coles said.
“Santander, Nationwide and Natwest were quickest off the block. Barclays, Lloyds, Halifax, Virgin Money and TSB have since joined the collective hike.”
Some 1.1 million which customers on standard variable rates and another 850,000 with trackers will pay more interest, adding £25 a month to the cost of a £200,000 mortgage.
Andrew Hagger, banking expert at MoneyComms.co.uk, said do not sit around waiting for your high street bank to increase “paltry” savings rates. “The big banks don’t deserve your custom, especially when you can find easy access savings deal paying up to 70 times as much.”
Savers will get a bit deal by switching to a best buy easy access account. Cynergy Bank pays 0.70 percent on £1 and above (but this falls to 0.30 percent after 12 months). Shawbrook pays 0.67 percent on a minimum £1,000.
Secure Trust Bank pays 1.1 percent on a minimum £1,000, with 120-days notice.
For those willing to lock their money away for longer, Zopa pays 1.37 percent on £1,000 and above for one year, while Secure Trust Bank pays 2.1 percent over five years.
Hagger added: “It’s quick and easy to open a new savings account online in just a few minutes, so what are you waiting for?”
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Anna Bowes, founder of Savings Champion, said banks are notoriously slow to hike savings rates, and many never act. “Last time base rate was increased, in August 2018, just 32 percent of all variable rate accounts increased.”
She added: “In the hugely unlikely event that the banks did pass on the full base rate rise, returns would average just 0.16 percent. This is far below today’s best buys.”
In a rare bright spot, National Savings & Investments increased the rate on its Direct Saver and Income Bonds from 0.15 percent to 0.35 percent.
The rate on its Direct Isa will rise from 0.1 percent to 0.35 percent. “These are still far from market leading,” Coles said.
To get a better return on your money, say goodbye to Scrooge.
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