Blizzard of rate cuts loom for your savings

SAVERS with the big banks face a barrage of hefty cuts to their rates over the next few weeks.

Some will end up with just 0.01 pc — or face earning just £1 interest for a whole year on each £10,000.

NatWest, RBS, Barclays, Halifax, Lloyds and Santander are all cutting rates, hitting loyal savers particularly hard.

Customers should vote with their feet and move their money to better deals (see table above).

On Monday, Natwest began the purge by cutting its Cash Isa and Instant Saver rates to the bone.

Instant Saver now pays a pitiful 0.01pc. The Cash Isa is also down at 0.01pc on sums up to £25,000. Even on £25,000, the rate is only 0.05pc, down from 0.5pc.

At £50,000, your rate is down by 0.5 percentage points to just 0.25pc. Your annual interest will tumble to £125 from £375.

Rates at RBS, which owns NatWest, also plunged this week. Its Instant Saver pays a lowly 0.01pc on balances up to £50,000 and 0.05pc over this level.

Its Instant Isa rates are down by as much as 0.5 percentage points to as little as 0.5pc.

And from yesterday, Santander joined in the cuts.

Its Easy Isa account pays just 0.1pc on up to £40,000.

Isa Saver pays as little as 0.1pc, too. You end up in this account after you have been in the bank’s Direct Isa or E-Isa accounts — both of which came with a bonus for the first 12 months. Savers have seen their rate cut this year by as much as 0.95 points against a fall in base rate of 0.25 points.

At the start of this year, you earned 0.5 pc on sums up to £10,000 and a better 1pc on £10,000-plus.

But a culmination of cuts in February and yesterday brings the rates down to a miserly 0.1 and 0.5 pc respectively.

Barclays Everyday Saver will drop to 0.05 pc from December 1. Its Instant Cash Isa, also once a top payer, will fall to 0.4pc on balances up to £15,000, 0.5pc at £15,000 and 0.6 pc at £30,000.

And just a week later, it is Halifax and Lloyds who will slash rates.

The rate on Lloyds Instant Saver and Instant Cash Isa will fall from 0.25 pc to 0.05 pc from December 8.

So will the rate on both Halifax Instant Saver and Instant Isa Saver.

The 80 pc cut will affect the majority of the banks’ easy-access and cash Isa savers. These are the accounts into which you are switched you once you have been with them for 12 months.

For example, if you take out a Halifax Isa Saver Variable now, you will earn 0.35pc for the first year. After that, your money is moved into the Halifax Instant Isa Saver, where the rate will be just 0.05 pc from December. To transfer your cash Isa, ask your newly chosen provider to organise the switch for you. Make sure it accepts transfers, as not all do. For example, Coventry BS at 1.1 pc and National Savings & Investments at 1pc, do not. To open an ordinary easy-access account online, put in the minimum you need at the start, then add the rest of your savings once it’s up and running. Accounts can be easy to open because you don’t usually have to provide documents proving who you are and where you live. Banks and building societies will check electronically via your current account and the register of electors. If you open a High Street account, then you need evidence of who you are and where you live. Your passport, driving licence, or a recent copy of a letter from HM Revenue & Customs or the Department for Work and Pensions will prove who you are. You will also need a utility bill, a credit card statement less than three months old, or a mortgage statement less than a year old to prove where you live.