Nationwide keeps best savings rates

SAVERS with Nationwide will be protected from the worst ravages of the Bank of England’s interest rate cut, the building society’s boss has pledged.

The Bank of England reduced base rate from an already-historic low of 0.5 per cent to 0.25 per cent earlier this month to stave off an economic slowdown – and it could drop even further.

Although the move is intended to get Britain borrowing and will lead to cheaper mortgages, it has prompted further slashing of already rock-bottom interest rates on savings accounts.

Nationwide chief executive Joe Garner said some of the building society’s customers would inevitably see their saving rates cut as a result. But he pledged to protect regular savers and those building up a deposit to get on the housing ladder.

The group said its 5 per cent Flexclusive Regular Saver, 3.5 per cent FlexOne Regular Saver and 2 per cent Help to Buy Isa rates would remain unchanged.

Mr Garner said: ‘We don’t want a generation to conclude that there’s no point in saving. We’re trying to encourage the regular savings habit.’

The announcement was welcomed by consumer rights groups. Anna Bowes, of Savings Champion, said: ‘As a High Street provider, Nationwide is definitely head and shoulders above everybody else. It’s good news they’re supporting their loyal customers.’

The move comes despite pressure the building society is under from the cut in rates.

Nationwide, a mutual, announced a 5.8 per cent profit rise in the three months to June 30, up to £401million.

But after stripping out paper gains due to accounting practices, underlying profits dropped 5.9 per cent to £368million.

Bosses said the fall was due to increased competition in the mortgage market, which had forced Nationwide to slash its rates.