Bailed out RBS and Natwest refuse to pass on rate cut to "balance" mortgages and savings accounts

09 March 2009 / by Rachel Mason
RBS and NatWest will not be passing on the latest base rate cut to Standard Variable Rate (SVR) mortgage holders, despite receiving a £20billion bailout from the taxpayer.

So far, Lloyds TSB, Cheltenham and Gloucester, Barclays, Woolwich, Abbey and Skipton have all said they will pass on the 0.50 per cent cut to their SVR mortgage holders, but RBS has said it will not be following suit because it needs to balance borrowings and savings.

"Following the Bank of England's announcement to reduce base rate to 0.50 per cent, NatWest and RBS will ensure they balance the need of borrowers and savers," the lenders said in a statement.

Customers with one of the RBS or NatWest flexible mortgages will see their rates reduced by 0.25 per cent from April 1 2009, but the SVR for both RBS mortgages and Natwest mortgages will be maintained at four per cent.

Savers will also see their rates cut, but, say RBS and NatWest, by "less than 0.20 per cent with many of our key savings accounts maintaining their current rates."

"The continued downward trend to Bank of England base rate has had a significant impact on customer savings rates," explained Paul Geddes, chief executive of RBS Retail Banking.

"It is more important than ever to consider both our savings and mortgage customers when determining any rate changes,"

But Moneysupermarket.com's Tim Newhouse says considering RBS has received a massive cash injection from the Government it is disappointing that the bank is both refusing to pass on mortgage rate cuts while still cutting savings accounts rates.

"It is disappointing to see the bailed-out RBS Group freezing SVR mortgage rates while cutting savings returns," he said. "It shows the futility of the Bank of England's decision on Thursday."

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