BANKS REWARD BORROWERS INSTEAD

MILLIONS of savers have paid the price for a mortgage war between lenders, experts claim.

Analysis by data firm Moneyfacts shows savings rates tumbled in 2019 despite the Bank of England’s 0.75% base rate not changing.

The average rate on an easy access account slipped from an already paltry 0.64% to 0.61% in the past year, figures revealed.

But customers willing to lock their money away for longer have been punished even more – especially pensioners .

The average interest rate paid on a two-year bond has dropped from 1.65% to 1.35% since last December, said Moneyfacts.

Yet while savers suffer – having already endured a decade of pitiful returns since the banking crisis – borrowers have been rewarded as lenders slashed rates on mortgages to attract custom.

For example, a typical two-year fixed rate mortgage has dropped from 2.51% to 2.44% in the past year, and the average three-year home loan has gone from 2.92% to 2.74%. Darren Cook, from Moneyfacts.co.uk, said: “This year has been a horrific one for savers, especially for those who rely on interest to supplement their income.” Baroness Altmann, a former pensions minister, said: “Savers feel forced into taking bigger risks to achieve a higher income, and some have ended up taking on debt because it’s not worth bothering to save any more. “Pensioners in particular have seen their income from savings slashed to the point that they have less money to spend each year in real terms.”

BLAST Baroness Altmann