Now it’s loyalty deals being cut by your bank

LOYALTY counts for nothing with some banks and building societies — many accounts for long- standing customers pay no more interest than a bog standard deal.

And even if you do find a loyalty account that pays extra, the reward can be less than 2p a day.

Leading building societies have cut payouts on accounts that are supposed to pay more for loyal savers, even though Bank of England base rate has been frozen at 0.5 pc for more than six years. And others could soon follow.

Sue Hannums, director of independent analysts Savings Champion, says: ‘ Cuts in rates for existing savers come on almost a daily basis. Top deals on loyalty accounts could be in the firing line.’

Loyalty deals come in two guises. Building societies offer accounts specifically to savers who have been with them for a year or more.

There are more than 200 easy-access accounts that have the word loyalty in their name.

The alternative is those preferential accounts offered to bank customers who also have a current account. These have all faced the axe.

Nationwide cut its easy- access Loyalty Saver last month, bringing down the rate from 1.2 pc after tax (1.5 per cent before) to just 0.96 pc (1.2 pc) — a 20 pc cut.

And this top rate is available only if you have been a member for 15 years or more. Otherwise members earn 0.88 pc (1.1 pc) if they’ve been there for up to ten years, 0.8 pc (1 pc) at five years and only 0.72 pc (0.9 pc) for between one and five years. This 0.72 pc (0.9 pc) rate is just 0.12 (0.15) percentage points more than the 0.6 pc (0.75 pc) Nationwide pays on its old Easy Access 4 account, which is closed to new savers. On a £5,000 balance, the price of your loyalty is just £6 extra interest a year after tax — or just 1.64p a day. Even for those who have served the 15-year term, the extra is just under 5p a day.

And the rate for those who have been with the society for up to five years is exactly the same as it pays on its Limited Access Account, which pays 0.72 pc (0.9 pc) to all savers who agree to make no more than five withdrawals a year.

Even the top loyalty rate of 0.96 pc (1.2 pc) is no more than you can earn on easy-access accounts in the High Street with other providers — and less than that offered on accounts you run on the internet.

Skipton BS cut the rate on its Loyalty Saver to 0.96 pc (1.2 pc) earlier this year. But it pays a higher 1 pc (1.25 pc) on its newer Limited Edition eSaver, open to all savers.

Even worse, its Loyalty Isa rate is down from a tax-free 1.5 pc to 1.2 pc.

New savers can sign up for its Bonus Cash Isa and earn a higher 1.5 pc. Its loyal savers can’t.

The society says transfers into the account are not allowed, including those from existing Skipton cash Isas.

A handful of building societies, including Leeds, Ipswich and Marsden, still pay 1.5 pc or more on their easyaccess cash Isas specifically aimed at loyal savers. But even these deals pay very little, if anything, more than you can earn elsewhere.

Others with top rates come with a range of restrictions.

Teachers BS Loyalty Saver — closed to new savers — pays 1.48 pc (1.85 pc). But once you have been in for a year, the rate drops to 1.08 pc (1.35 pc).

Newbury BS Existing Savers pays a decent 1.68 pc (2.1 pc). But you can put in only a maximum of £4,000 each tax year.