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Jun 19, 2016

Which? Slams "Scissors-Happy" Isa Providers: The Guardian | Money | Savings | Isas - June 20, 2016 ( 00:01 BST)

theguardian.com

Too many Isa providers are “scissor-happy” when it comes to chopping savers’ rates, according to Which?

The consumer group analysed 212 instant-access cash Isas from 21 banks and building societies to find the “worst offenders” when it comes to rate cuts over the past six years. It looked at how many cuts were made and the number of cuts per account.
The research carried out in April focused on cuts for existing Isa customers and excluded those they would have known about when they took out the account, such as bonus rates expiring.
Which? said NatWest, part of Royal Bank of Scotland, had the highest number of cuts per account, with eight across two accounts over six years- a rate of four cuts per account.
Its e-Isa previously earned savers 2%, but customers who haven’t moved their money would now be earning a “meagre” 0.25%, Which? said.
The consumer group also found Tesco Bank had made three rate cuts on one account, Royal Bank of Scotland had made two cuts on one account and Barclays 13 across seven accounts.
Harry Rose, Which? money editor, said: “Many savers simply want a provider they can trust to keep their Isa rate competitive. Too many banks are paying truly woeful rates of interest or are scissor-happy when it comes to cutting rates often penalising their most loyal customers”
A spokesman for the British Bankers’ Association said: “These have been frustrating years for savers. The Bank of England’s base rate has remained at a record low for several years and while this has been good news for borrowers it has fostered a low interest rate environment, which has not been easy for many savers to bear. During this period banks have made it easier for savers to find the right products for their needs.”
A NatWest spokesman said: “We have simplified our savings products to help meet our customers’ needs. In addition we no longer offer teaser rates meaning existing customers benefit from the same or better savings rates than new customers.”