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Are big banks complying with Consumer Duty obligations?

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James Hyde, Press & PR Manager
James Hyde, Press & PR Manager T: 01603 476205 E: Email James
05/06/2024

Are the big banks complying with their Consumer Duty obligations?

Data from Moneyfactscompare.co.uk shows that the big banks are continuing to offer easy access savings rates well below the average, despite their continued obligation via the Financial Conduct Authority to offer fair value to customers.

Are the big banks complying with their Consumer Duty obligations?

Data from Moneyfactscompare.co.uk shows that the big banks are continuing to offer easy access savings rates well below the average, despite their continued obligation via the Financial Conduct Authority to offer fair value to customers.

  • The big banks all pay less than 2% on their most accessible no-notice accounts, even though over 80% of the market (292 of 364 products) currently pay 2% or higher on a £10,000 balance.
  • These selected accounts, offered by Barclays Bank (1.65%), HSBC (1.98%), Lloyds Bank (1.40%), NatWest (1.74%) and Santander (1.70%) pay an average of 1.69% interest between them - a significant 1.43% less than the market average across all available easy access accounts at present.
  • In addition, their easy access ISA rates are less competitive still. While HSBC doesn’t currently offer any easy access ISAs to new customers, the remaining four big banks offer an average of 1.62% on their easy access ISAs – less than half the market average of 3.31%.
  • The big banks all pay less than 2% on their most accessible no-notice accounts, even though over 80% of the market (292 of 364 products) currently pay 2% or higher on a £10,000 balance.
  • These selected accounts, offered by Barclays Bank (1.65%), HSBC (1.98%), Lloyds Bank (1.40%), NatWest (1.74%) and Santander (1.70%) pay an average of 1.69% interest between them - a significant 1.43% less than the market average across all available easy access accounts at present.
  • In addition, their easy access ISA rates are less competitive still. While HSBC doesn’t currently offer any easy access ISAs to new customers, the remaining four big banks offer an average of 1.62% on their easy access ISAs – less than half the market average of 3.31%.

 

Big banks’ easy access selection*

Provider

Account

Gross rate at £10k

Difference to average rate paid (3.12%)

Barclays Bank

Everyday Saver

1.65%

-1.47%

HSBC

Flexible Saver

1.98%

-1.14%

Lloyds Bank

Easy Saver

1.40%**

-1.72%

NatWest

Flexible Saver

1.74%

-1.38%

Santander

Easy Access Saver

1.70%***

-1.42%

*Deals available to new customers and includes accounts that allow multiple withdrawals without penalty. **Reverts into Standard Saver after 12 months, which currently pays 1.40%. ***Reverts into Everyday Saver after 12 months, which currently pays 1.20%. Based on a £10,000 deposit, gross rates. Data correct as of 3.6.24. Source: Moneyfactscompare.co.uk

       

Big banks’ easy access ISA selection*

Provider

Account

Gross rate at £10k

Difference to average rate paid (3.31%)

Barclays Bank

Instant Cash ISA – Issue 1

1.65%

-1.66%

HSBC

N/A

N/A**

N/A

Lloyds Bank

Cash ISA Saver New customers

1.40%***

-1.91%

NatWest

Cash ISA

1.74%

-1.57%

Santander

Easy Access ISA (Issue 21)

1.70%****

-1.61%

*Deals available to new customers and includes accounts that allow multiple withdrawals without penalty. **HSBC has no easy access ISA products available to new customers. ***Reverts into Instant Cash ISA after 12 months, which currently pays 1.40%. ****Reverts into ISA Saver after 12 months, which currently pays 1.20%. Based on a £10,000 deposit, gross rates. Data correct as of 3.6.24. Source: Moneyfactscompare.co.uk

 

 

Big banks’ easy access selection*

Provider

Account

Gross rate at £10k

Difference to average rate paid (3.12%)

Barclays Bank

Everyday Saver

1.65%

-1.47%

HSBC

Flexible Saver

1.98%

-1.14%

Lloyds Bank

Easy Saver

1.40%**

-1.72%

NatWest

Flexible Saver

1.74%

-1.38%

Santander

Easy Access Saver

1.70%***

-1.42%

*Deals available to new customers and includes accounts that allow multiple withdrawals without penalty. **Reverts into Standard Saver after 12 months, which currently pays 1.40%. ***Reverts into Everyday Saver after 12 months, which currently pays 1.20%. Based on a £10,000 deposit, gross rates. Data correct as of 3.6.24. Source: Moneyfactscompare.co.uk

       

Big banks’ easy access ISA selection*

Provider

Account

Gross rate at £10k

Difference to average rate paid (3.31%)

Barclays Bank

Instant Cash ISA – Issue 1

1.65%

-1.66%

HSBC

N/A

N/A**

N/A

Lloyds Bank

Cash ISA Saver New customers

1.40%***

-1.91%

NatWest

Cash ISA

1.74%

-1.57%

Santander

Easy Access ISA (Issue 21)

1.70%****

-1.61%

*Deals available to new customers and includes accounts that allow multiple withdrawals without penalty. **HSBC has no easy access ISA products available to new customers. ***Reverts into Instant Cash ISA after 12 months, which currently pays 1.40%. ****Reverts into ISA Saver after 12 months, which currently pays 1.20%. Based on a £10,000 deposit, gross rates. Data correct as of 3.6.24. Source: Moneyfactscompare.co.uk

 

James Hyde, Spokesperson at Moneyfactscompare.co.uk, said:

“Consumer Duty regulations regarding existing products have been in effect since 31 July 2023, meaning companies have had almost a year now to review any previously uncompetitive products, and bring them into compliance with the rules laid out by the Financial Conduct Authority.

“Unfortunately, the big five banks are still paying significantly sub-par variable savings rates. Their most accessible no-notice accounts all offer less than 2% interest per annum – putting them all in the bottom fifth of the market.

“Currently, a saver who put £10,000 in an easy access ISA offered by a big bank would lose out on £169 in interest each year (compared to the market average rate paid), or £344 (on a market-leading account).

“Rules regarding closed accounts come into effect this summer, so it remains to be seen if there is more urgency to improve rates going forward.

“As always, customers are encouraged to proactively monitor savings rates, particularly if they’re on a variable rate which providers can adjust on a very reactive basis. People should be prepared to switch if they feel their loyalty is not being adequately rewarded.”

James Hyde, Spokesperson at Moneyfactscompare.co.uk, said:

“Consumer Duty regulations regarding existing products have been in effect since 31 July 2023, meaning companies have had almost a year now to review any previously uncompetitive products, and bring them into compliance with the rules laid out by the Financial Conduct Authority.

“Unfortunately, the big five banks are still paying significantly sub-par variable savings rates. Their most accessible no-notice accounts all offer less than 2% interest per annum – putting them all in the bottom fifth of the market.

“Currently, a saver who put £10,000 in an easy access ISA offered by a big bank would lose out on £169 in interest each year (compared to the market average rate paid), or £344 (on a market-leading account).

“Rules regarding closed accounts come into effect this summer, so it remains to be seen if there is more urgency to improve rates going forward.

“As always, customers are encouraged to proactively monitor savings rates, particularly if they’re on a variable rate which providers can adjust on a very reactive basis. People should be prepared to switch if they feel their loyalty is not being adequately rewarded.”

Notes to editors

Pioneering financial comparison technology for over 35 years.

Moneyfacts Group plc is the UK’s leading provider of retail financial product data. Used by virtually every bank and building society in the UK, and supplied to the Bank of England, Financial Conduct Authority, Financial Ombudsman Service, HM Treasury, Prudential Regulatory Authority and UK Finance.

Our expert research team monitors the thousands of mortgages, savings, credit card, personal loan, business banking, life, pension and investment products in the UK.

Moneyfactscompare.co.uk is the financial product price comparison site, launched as Moneyfacts.co.uk in 2000 and rebranded to Moneyfactscompare.co.uk in 2023, which helps consumers compare thousands of financial products, including credit cards, savings, mortgages and many more. Unlike other comparison sites, Moneyfactscompare.co.uk shows whole of market data regardless of commercial bias, showing consumers a true picture of the best products based on the criteria they select.

We hope you find this press release insightful. We would appreciate a link back to Moneyfactscompare.co.uk if you decide to source this information.

For more information about us please see our key facts.

Broadcast

Our broadcast suite enables our finance experts to appear in-vision for television, and we regularly comment live on national and regional radio.

To arrange an interview for radio or television, please contact our press department. We have an in-house broadcast room.

 

Notes to editors

Pioneering financial comparison technology for over 35 years.

Moneyfacts Group plc is the UK’s leading provider of retail financial product data. Used by virtually every bank and building society in the UK, and supplied to the Bank of England, Financial Conduct Authority, Financial Ombudsman Service, HM Treasury, Prudential Regulatory Authority and UK Finance.

Our expert research team monitors the thousands of mortgages, savings, credit card, personal loan, business banking, life, pension and investment products in the UK.

Moneyfactscompare.co.uk is the financial product price comparison site, launched as Moneyfacts.co.uk in 2000 and rebranded to Moneyfactscompare.co.uk in 2023, which helps consumers compare thousands of financial products, including credit cards, savings, mortgages and many more. Unlike other comparison sites, Moneyfactscompare.co.uk shows whole of market data regardless of commercial bias, showing consumers a true picture of the best products based on the criteria they select.

We hope you find this press release insightful. We would appreciate a link back to Moneyfactscompare.co.uk if you decide to source this information.

For more information about us please see our key facts.

Broadcast

Our broadcast suite enables our finance experts to appear in-vision for television, and we regularly comment live on national and regional radio.

To arrange an interview for radio or television, please contact our press department. We have an in-house broadcast room.

 

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James Hyde Press & PR Manager
Rachel Springall Press Officer / Finance Expert
Caitlyn Eastell Apprentice Press & PR Assistant