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75% of consumers worried about savings rates

06 February 2009 / by Rachael Stiles
Three quarters of British consumers are concerned about falling savings rates, according to consumer watchdog Which?

And savers have even more cause for concern after the Bank of England cut the base rate yet again yesterday, by 0.5 per cent, which will see the returns on their investments fall even further.

Savers have now had to endure five consecutive base rate cuts, seeing it fall from five per cent last September to just one per cent yesterday.

The affects of the falling base rate on savings accounts is an understandable source of worry for the majority of Brits, especially those on fixed incomes such as retired people, many of whom rely on the returns from their life savings and investments to top up their pension.

"Our research shows that savings rates are a major area of concern for consumers and it's no wonder given the eagerness of banks to slash their already miserly rates at the drop of a hat." said Peter Vicary-Smith, chief executive of Which?

Banks are being encouraged by the Government to lend more to homeowners, but are struggling to maintain competitive savings rates in the meantime.

So while many mortgage customers – particularly those with tracker mortgages – are reaping the benefits of a slowing economy on their monthly repayments, savers have fallen by the wayside.

Many savings providers have already cut their rates substantially, some to less than one per cent, so there is little room for these rates to go following the most recent rate cut from the Bank of England.

Mr Vicary-Smith added: "The big name high street banks have consistently let their customers down so savers should vote with their feet by moving their money to one of the smaller institutions still offering decent rates."

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