MILLIONS STUNG BY GREEDY BANKERS

Savers hit by ‘rushed’ interest rate cut

SAVERS were hit with vicious interest rate cuts from the big banks yesterday. HSBC became the first bank to clobber savers after the Bank of England halved official rates from 0.5 per cent to 0.25 per cent on Thursday.

Halifax, Tesco Bank, Clydesdale Bank and West Bromwich Building Society followed with cuts on some accounts. Experts warned savers to expect a ‘bloodbath’ of the top deals as the payouts on some accounts were slashed to as little as 0.05 per cent, leaving savers earning just £5 a year on a £10,000 lump sum.

Lenders were accused of cashing in by squeezing savers while denying families a reduction in home-loan

bills. Half of Britain’s 20 biggest lenders are still refusing to cut mortgage rates.

yesterday just four more firms – HSBC, TSB, NatWest and Skipton Building Society – promised to pass on the full 0.25 percentage point cut to homeowners, taking the total to ten.

But the harshest reductions to savings deals also came from HSBC, which lowered rates by 0.25 percentage points on six variable accounts. State-

‘Bloodbath of the best rates’

backed giant Halifax, West Brom and Clydesdale all cut rates on tracker savings accounts that were linked to the Bank of England rate.

Halifax, Britain’s biggest savings provider, also warned that base rate cuts ‘will be taken into consideration along with a number of other factors’ as it reviews the interest on its other deals.

National Savings & Investments, which has 25million customers, also warned of lower returns. a spokesman for the Government’s savings arm, whose products include premium bonds and ISas, said: ‘If our competitors cut rates for savers, we will have to review ours.’

Baroness altmann, the former pensions minister, called on the Government to introduce special savings rates paying up to 4 per cent a year.

She said: ‘People who want to be prudent and look after themselves in retirement, rather than relying on borrowed money, are being taken advantage of. The aim of the Bank of England’s policy seems to be to force people to take more risk to get a return on their money.

‘That’s fine for banks, but not for ordinary people who can’t afford to gamble their savings away and the Government should consider subsidising their returns.’

Susan Hannums, of website Savings Champion, said: ‘It looked like rates couldn’t get any worse for savers, but they’re falling again. This could turn into a bloodbath of the best rates on the market.

‘For pensioners who rely on the interest from their savings it’s going to cause quite a nasty dent to their incomes.’

Experts warned that savers who earn less than the infla-

‘Nasty dent to their incomes’

tion rate will see the value of their cash decline.

and banks are also expected to cut current account rates. Santander said it was reviewing its popular 123 current account, which currently pays up to 3 per cent.

TSB also issued a statement saying it was reviewing its rates. It pays 5 per cent on its Classic Plus current account.