Has your savings provider passed on the most recent base rate cut?

More than 20 banks and building societies have already lowered their variable savings rates.

It’s crucial savers check they’re receiving competitive returns on their hard-earned cash as over 20 providers responded to the Bank of England lowering the base rate last Thursday by cutting their variable savings rates – and more could soon follow suit.

By the end of the working week, customers of more than a dozen banks and building societies were already being paid a lower rate, while others had been informed that the full 0.25 percentage point cut would be passed on to their account.

“It is essential consumers stay in tune with market movements and switch to ensure they are not getting a raw deal,” said Rachel Springall, Finance Expert at Moneyfactscompare.co.uk.

“In the coming weeks more savings providers will need to decide whether to pass on the 0.25% cut, but as we have seen over the last few days, sometimes they can cut by bigger or smaller margins,” she added.

Atom Bank, for instance, reduced its Instant Saver Reward by 0.58 percentage points to offer 3.93%, while Cynergy Bank cut its Online ISA and Easy Access account by 0.30 and 0.45 percentage points, respectively, to pay 3.90% and 4.00%.

As a result of these and similar cuts, the Moneyfacts Average Savings Rate dropped from 3.50% on Thursday (7 August) to 3.48% today.

Rising inflation poses a further threat

To add insult to injury, the Bank of England now expects inflation to rise to 4.00% in the coming months which threatens to further diminish savers’ returns in real terms.

“As it stands, less than 10% of variable rate savings accounts pay more than 4% and it’s not much better including fixed deals, as overall less than a third of the standard savings market pays over 4%^*,” said Springall.

“Savers need to keep a close eye on the market for any vanishing accounts and ensure they abandon their loyalty if it is not being rewarded with a decent savings rate,” she concluded.