Banks fail to pass on rate rise

THE decision to increase interest rates on August 2 should have been a boost for savers.

But, four weeks on from the Bank of England raising rates from 0.5 to 0.75 per cent, not one big lender has passed on the full rise to all its customers.

Only three small building societies – Holmesdale, Beverley and Swansea BS – have pledged to increase their rates on all accounts by 0.25 percentage points. Three quarters of banks and building societies have failed to reveal any plans to change their rates, says advice website Savings Champion.

Of those that announced changes, many have only offered a 0.1 percentage point rise or increased the rates on some accounts but not others.

The average savings rate is 0.5 per cent, with some major providers paying as little as 0.05 per cent.