I have to confess to a degree of unease with the way the banks are behaving at the moment. I received an email from one of our major banks the other day to tell me that they were reducing the rate of interest they paid on their instant saver account from 0.35% to 0.01%. Their other accounts, and their range of ISAs, are also suffering similar rate drops and when I posted my dissatisfaction on social media I had lots of responses from other readers telling me that they had received similar emails from their own banks.
As a percentage drop these are much greater than the recent reduction in base rates announced by the Bank of England a couple of weeks ago.
And at the same time as they are reducing rates for savers by more than the Bank of England reduction in base rates they are also reducing their mortgage rates by less than the Bank of England reduction in rates, meaning that the full reduction is not being pass to mortgage payers at the time that they really need it most.
I also think that the banks should have offered to cut rates on overdrafts and loans rather than having to wait on the FCA telling them to do it.
Likewise I’m hearing too many stories of people applying for loans for their businesses – much needed cash to see them through until the government money arrives – and being told that either they can’t get a loan or they can only get a loan if they put up their house as a personal guarantee.
I’m sure that the Chancellor said that the banks shouldn’t be insisting on personal guarantees when people came to them for loans that the government could effectively underwrite.
Just over ten years ago many banks in this country received a huge amount of support from the government and the country. It’s time the banks repaid that debt. We need their help now and they should deliver. And if they won’t do it on their own then the government should step in and make them do it.
Morning Fergus. You forgot to mention that most banks charge between 18% and 23% on credit cards.