A number of my Eddisbury constituents have, quite rightly, contacted me about the failure of some banks and building societies to pass on interest rate rises to their customers appropriately.
Banks should be passing on interest rate increases to savers.
The new ‘Consumer Duty’ gives the Financial Conduct Authority (FCA) the tools they need to act against financial institutions that shirk this moral responsibility.
Firms offering the lowest savings rates will be required to justify how those rates offer fair value by the end of August. If they are unable to do so, the FCA will take action.
More broadly, the duty demands firms be both open and honest, avoid harm, and support you in pursuing your financial goals.
We want a competitive cash savings market that delivers better deals for savers, in which interest rates are reviewed quickly following base rate changes, and firms prompt savers to switch to accounts paying higher rates.
As consumers continue to face financial pressures due to the increase in the cost of living, it is critically important they can benefit from competitive interest rates to protect the value of their savings and they receive fair value from firms as required by the Consumer Duty.
If you have a problem with your banking provider, or feel they are failing to meet the Duty’s standards, you should complain to them in the first instance. ‘Which?’ - the consumer association - has some great advice about making an effective complaint to your bank, which should make the process smoother.
If you are unhappy with their response, contact the Financial Ombudsman Service directly.
And remember: if you think you should be receiving a better service or value for money, you should also consider shopping around and switching banks. Again, ‘Which?’ has some good, up-to-date advice about available types of savings accounts.
You can switch your current account, too. The Account Switch Service Guarantee means your new bank will switch your payment settings to your new account, as well as transfer your balance. Your old bank will close your previous account, so you don’t even need to worry about that.
Finally - as with all financial decisions - make sure you read the small print and seek independent financial advice if unsure. To find out more, visit the Citizens’ Advice Bureau financial advice pages.
I hope you find these tips helpful in keeping more of your and your family’s hard-earned cash.
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