Interest rates are at an all-time low and many savers are struggling to find bank and building society accounts that are keeping pace with inflation, and in fact many are finding that their money is lying around in accounts that don’t even match the 0.5% Bank of England base rate. In fact the Financial Conduct Authority has just reported that around £160bn is lying around in these types of account.
To make matters worse the City regulator the Financial Conduct Authority has just reported that many consumers are confused by the rate their bank or building society pay and that they find it difficult to switch to accounts paying better rates of interest.
Christopher Woolard, Director of Strategy and Competition at the FCA, said. “In a good market firms should be competing to offer the best possible deal and consumers should have the information they need to help them shop around. We want to see firms making simple information much easier to find. More also needs to be done to reduce the hassle for consumers to switch their savings.”
So the FCA intends asking savings providers to be more transparent about the way they display rates to existing savers, and to make it easier to provide a way for consumers to view and manage accounts with different providers. They are also keen to make sure that the switching process is made easier so that consumers are not put off moving money to banks and building societies offering higher rates.
This is something that the FCA should have done long ago, but better late than never and perhaps this action will be a wake up call to consumers to take action and get the most out of their savings. There is a great deal of apathy when it comes to looking after our money, and the vast majority of savings are put in a bank or building society account and left there for years, regardless of what happens to the rate of interest being paid on the account. It’s up to us as savers to tell the providers of these accounts that the low rates they are paying need to change, and the best way to do that is by moving our money out of these accounts.