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Michael Brown

Acting Editor
Published: 27/03/2023
Houses of Parliament

Three of the four banks wouldn’t disclose revenue generated through savings accounts.

Barclays UK, HSBC UK, Lloyds Banking Group and NatWest group have all defended their savings rates which were criticised by the Treasury Committee earlier this month.

In a series of letters, the Treasury Committee said that, despite successive base rate increases to 4.00% in the space of just over a year, these four banks all offer less than 1% AER for their easy access savings accounts.

It then used this backdrop to question how each bank passes on its interest to their savers, among other questions.

In response, all four banks hit back at the letters and highlighted the other variable accounts on offer.

Regular savings accounts

HSBC UK, Lloyds Bank and NatWest all referred to their regular savings accounts in response to the committee’s probes.

Regular savings accounts differ from easy access accounts as they are often more “rigid”, according to Rachel Springall, Finance Expert at

“Harsh penalties can be applied if payments are missed or withdrawals are made, so they are most suitable for savers who need a strict savings plan and who wish to avoid dipping into their cash early,” she explained.

For example, first direct’s Regular Saver Account, which was mentioned in HSBC’s response, will close altogether if a withdrawal is made in the first year.

Plus, like other regular savings accounts, it also caps the amount of money you can add to it each month. This monthly cap sits at £300, which means the most interest you can earn from this offer is just over £139 across the one-year period.  

Springall also encouraged savers to compare regular savings accounts carefully, as some are often exclusively available to certain customers. Lloyds Bank’s Club Lloyds Regular Saver is one such example, and this offer was highlighted in in the banking group’s response to the Treasury Committee.

“Our regular and monthly savers, for example, pay well in excess of the current base rate – for example, our Club Lloyds Regular Saver now pays 6.25% [AER],” Charlie Nunn, Group Chief Executive of Lloyds Banking Group wrote.

However, this account is only available to Club Lloyds current account holders. In order to open a Club Lloyds current account you’ll need to pay a £3 monthly fee or pay in at least £2,000 per month from April.

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Meanwhile, Barclays UK referred to its Rainy Day Saver account, which is an easy access account that pays 5.12% AER on balances up to £5,000.

According to its calculations, it means you’ll earn just over £51 a year on a £1,000 deposit and just over £250 a year on a £5,000 deposit.

However, in order to access this rate, you’ll need to be a Barclays Blue Rewards member.

Memberships cost £5 a month, but you can earn some or all this fee back if you take out a mortgage, home insurance policy, life insurance policy or loan with the provider.

If you’re purely looking to join for access to its easy access account, then remember you’ll effectively be losing money if your balance sits at £1,000 over a one-year period.

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“Commercially sensitive” information

When questioned on the revenues generated by savings products in 2021 and 2022, three of the four banks refused to disclose this information.

Barclays UK, HSBC UK and the Lloyds Banking Group all claimed the information was “commercially sensitive” and therefore couldn’t be provided to the committee.

However, the NatWest Group broke from its peers and revealed that it earned almost 14 times its savings revenue last year compared to 2021.

Last year it earned £1.09 billion in revenue from savings products while in 2021 it received £80 million.

FCA involvement

“While consumers should continue to shop around for the best rates, the information we’ve received from the UK’s biggest high street banks demonstrates there is much more that can be done,” said Harriett Baldwin MP, Chair of the Treasury Committee.

She confirmed that the Treasury Committee, which is part of the House of Commons, has written to the Financial Conduct Authority (FCA) to share information on the state of competition in the banking sector.

“We anticipate that the financial regulator will want to look into this issue in further detail, in particular whether the market is truly competitive and if retail banks are relying on customer inertia to keep savings rates low,” Baldwin said.

The Treasury Committee expects a response from the country’s financial watchdog by 12 April.


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