Savers: Basic Savings Rate Falls Short, Say Most

78 per cent of savers say banks take advantage of loyalty by paying lower rates to existing customers
77 per cent want banks to pay new and existing customers the same rate
Only 29 per cent plan to switch savings accounts in the next 12 months

LONDON, Oct. 24, 2018 – Despite the Financial Conduct Authority’s (FCA) efforts to boost competition in the savings market and explore the introduction of a Basic Savings Rate (BSR), new research reveals that 59 per cent of UK savers think the measures simply won’t go far enough. Further, 67 per cent say that if banks were able to set the rate themselves, it would be too low to make any significant difference.

The research conducted by Ford Money, the UK savings bank from Ford Motor Company’s financial services business, Ford Credit, highlights how 78 per cent feel that banks are taking advantage of loyalty by paying lower rates to existing customers.

When asked what the FCA should do to help customers:

46 per cent say it should get banks to pay new and existing customers the same interest rate
32 per cent say it should control the difference between the interest rates banks pay to new and existing customers
45 per cent say it should set the BSR at the same level as the Bank of England base rate

Findings also suggest the BSR may not have the desired effect. Nearly half (45 per cent) state they would be less likely to switch to a more competitive savings account even if a BSR were introduced.

“While the Basic Savings Rate could help savers stuck with accounts paying rock-bottom rates, it could also lull customers into a false sense of security. This is especially true when you can find more competitive rates by switching to providers that pay fair and consistent rates over time and reward loyalty,” said Suzanne Lewsley, Ford Money’s chief deposits officer.

The research also found that consumer apathy is common in the savings market:

54 per cent have held their main savings account for more than five years
32 per cent are unlikely to switch savings accounts in the next 12 months
27 per cent say they have never switched to a new savings provider

Of those who are unlikely to switch, 56 per cent say it’s because they like their current provider, while 37 per cent say it’s not worth the hassle as interest rates are too low. A further 26 per cent say it is more convenient for them to have their savings and current account with the same bank.

“The savings industry needs a shakeup and to do its part to recognise loyal savers. It shouldn’t rest solely on regulator interventions for the industry or savers to act with their feet to acknowledge and reward longtime customers with fair rates,” Suzanne said. Since its launch in April 2017, Ford Money has been shortlisted for a number of consumer money awards, underlining its commitment to delivering fair and consistent service for savers.

In 2018, Ford Money was ‘Highly Commended’ in the ‘Best Savings Provider for Large Deposits’ category at the Moneywise Customer Service Awards. Ford Money also was named Best New Savings Provider in January at the Moneynet Personal Finance Awards 2018.

Ford Money services are available online at www.fordmoney.co.uk and include a range of savings products and ISAs.

Deposits of up to £85,000 are protected by the UK government’s Financial Services Compensation Scheme (FSCS).

Notes to editors

All figures, unless otherwise stated, are from a survey by Opinium, commissioned by Ford Money. Total sample size was 1,608 UK savers. Fieldwork was undertaken from 5-8 October 2018. The survey was carried out online. The figures have been weighted and are representative of all UK adults (ages 18+).

On 25July 2018, the Financial Conduct Authority opened a discussion on introducing a basic savings rate (BSR) in the cash savings market. The proposed BSR ensures banks and building societies pay customers a fair rate of interest without continually switching accounts.

The ‘Bank of England base rate’ is part of the monetary policy action the Monetary Policy Committee takes to meet the target that the Government sets to keep inflation low and stable. The base rate is the interest rate the Bank of England pays to commercial banks that hold money with them. It influences the rates those banks charge people to borrow money or pay on their savings.

About Ford Motor Credit Company
Ford Motor Credit Company is a leading automotive financial services company. It provides dealer and customer financing to support the sale of Ford Motor Company products around the world, including through Lincoln Automotive Financial Services in the United States, Canada and China. FCE Bank is a subsidiary of Ford Credit, which is a subsidiary of Ford. For more information, visit www.fordcredit.com or www.lincolnafs.com.

About Ford Money

As part of Ford Credit Europe (licensed as FCE Bank plc), Ford Money is a savings provider in the UK. FCE is a registered bank in the UK, authorised by the Prudential Regulation Authority (PRA) and regulated by the Financial Conduct Authority (FCA) and PRA to accept deposits. Deposits of up to £85,000 are protected by the UK government’s Financial Services Compensation Scheme (FSCS). For more information, visit www.fordmoney.co.uk.

Ford Money is a trading style of FCE Bank plc., which is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority under Firm Reference Number 204469. Registered in England and Wales under registration number 772784.

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Savers: Basic Savings Rate Falls Short, Say Most

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