UK banks cut the savings rates
London (Ask4loan) 11 January, 2008: Brits have suffered huge cuts on the returns that they get on savings with large banks and building societies. Interest rates on savings have been cut by as much as 0.6% since August 2007, despite the fact that base rate of interest has fallen only by 0.25% during the same time.
Before December's base rate cut of 0.25%, lenders like Halifax, Lloyds TSB, Nat West, RBS, Abbey and Barclays had reduced their rates on savings. The savings have become less lucrative through a series of small cuts designed to hide the full extent of the damage. Lloyds TSB cut rates on its Internet-based Online Saver by 0.6% between August 2 last year and January 2 this year, while Halifax has cut its Saver Reward by 0.59%. Similarly, other banks and building societies have reduced the rates offered on savings.
Some savings accounts run by the large banks also take into consideration how much you have in the account, with larger cuts meted out to those with smaller balances. Nationwide, the largest building society, limited the cuts in savings rate to 0.25% between August and January, very much in line with the base rate of interest.
Since the global credit crunch hitting the UK financial markets, the overall interest rates on loans and mortgages have shot upwards. The borrowers are facing hard times in raising credit through unsecured personal loans, most of these products having been withdrawn by the lenders.