How rock-bottom rates are short-changing loyal savers like never before

BRITAIN’S biggest High Street banks are betraying savers by stubbornly keeping rates at rock-bottom levels. Worst offender Barclays pays customers with its easy-access account just 0.01 pc — a miserly 10p for every £10,000 saved.

This is the same pitiful rate offered when Bank of England base rate was 0.1 pc, despite five consecutive rises in six months.

Elsewhere, savers can earn 1.5pc, some 14,900 pc more than with this dud Barclays account.

Yet the banking giant is content to raise its borrowing costs. From August 1, its default or standard variable rate (SVR) will rise to 5.74 pc — one of the highest of all banks.

James Blower, The Savings Guru, says: ‘It’s disgraceful. Barclays moved at lightning speed to lift mortgage rates, and has the worst SVR, yet has passed nothing on to savers. Unfortunately, it knows most of its savers will do nothing and it is using this situation purely to boost profits.’

Our table, right, shines a light on the worst accounts. Most big banks have kept easy-access rates below 0.25pc. This is despite the base rate, which has already been increased to 1.25pc, expected to continue rising to fight runaway inflation.

Fixed-rates have not fared much better. While savers can now bag a leading 2.72 pc over 12 months and 3.08 pc for two years, no High Street bank comes close to that.

NatWest/RBS do not offer ordinary accounts with fixed rates.

HSBC pays just 0.45 pc and 0.5 pc over one year and two years respectively, with a measly 0.1 percentage point increase coming next week.

Even where rates are raised, savers are urged to check as banks and building societies are increasingly putting the onus on customers to apply for the new deal rather than paying it automatically.

Many do this by launching new issues of the same account that pay a higher rate of interest.

It means loyal savers will not earn the higher rate unless they open the new version and transfer their money into it.

Experts say providers hope people won’t notice they are in an older version where the rate can be more than 1 percentage point less generous. One banking giant even hinted that customers are not bothered about earning a low rate as it doesn’t make a ‘material difference in their savings’.

Anna Bowes, from website Savings Champion, says: ‘Don’t assume the rate now in the shop window is what you are earning. It is vital to check your rate so you don’t miss out.’

Money Mail reader Craig Jackson, from Crawley in Sussex, found he was being short-changed with his Sainsbury’s Bank cash Isa after it hiked the rate last month for new savers.

He says: ‘My online account showed that I was still earning 0.35pc even though Sainsbury’s current rate is 1.22pc. The bank said I was expected to ring to ‘claim’ the new rate.’

On this account the rate is as low as 0.15 pc if you opened it between January 21 and July 19 last year — 1.07 points below its advertised return. If you took out the account before this date, your rate is 0.35 pc.

Readers Lavinia Underhill, from Herefordshire, and Anne, from Somerset, have reported the same sneaky tactic and both claim it is impossible to contact the supermarket bank via telephone to boost their deal.

Meanwhile, Nationwide launched a new version — issue 15 — of its One Year Triple Access Online Saver last week paying 1.4 pc. But savers in older versions are earning a lowly 0.25 pc — a huge 1.15 percentage points less.

Even those who opened issue 14 only earn 1 pc, well below the new 1.4 pc. The rate is fixed for 12 months as long as you restrict your withdrawals to three a year.

After the term ends, the building society moves you into an instant access savings account which pays a much lower rate.

Santander earlier this month increased the rate on its eSaver account to 0.75 pc with the launch of issue 20. Savers earn this rate for a year, after which they are transferred into its Everyday Saver currently paying just 0.1 pc.

HSBC is boosting the rate on its Online Bonus Saver to 1.3 pc from 0.45 pcnext week.

However, this is only on balances up to £10,000 and savers have to move their money from its flexible saver account to get the new rate.

Currently, this pays just 0.1pc and will pay just 0.2pc from next week, some 1.1pc lower than the bank’s Online Bonus Saver.

Marcus by Goldman Sachs recently raised its bonus from 0.1 pc to 0.25 pc to bring its easy access rate up to 1.3 pc.

Savers already in the account did not have to open a new one. But they still had to claim the new bonus.

Money Mail is today calling on savers to move the billions held in low-paying instant access accounts and grab a fairer deal.

We are also urging the Financial Conduct Authority to bring back its proposal for a basic minimum savings rates to protect loyal customers.

Saffron BS raised its eSaver issue 20 from 0.65 pc to 1.05 pc. At the same time, it raised the rates on previous issues to match.

Ford Money, Kent Reliance, Aldermore and Shawbrook Bank are among those who follow this practice.