We have published an update on the actions we have taken since our July 2023 cash savings market review, and the work we have done with the largest 9 firms on the value they provide.
Read our update on cash savings
The average interest paid on easy access savings accounts rose to 2.11% in June 2024, up from 1.66% in July 2023 when we published our review. We estimate savers are £4bn a year better off from higher interest rates as a result.
Our latest analysis also shows that while firms were benefitting as base rates increased, these benefits were increasingly passed to savers.
We continue to encourage savers to shop around to get the most from their money. There were 174 accounts that offered over 4% interest in August, while the largest firms continue to pay below average for easy access products. Switching is straightforward – and 89% of ISA switches happen within 7 days. Consumers should also consider if easy access accounts are best suited to their savings needs.
As the base rate has started to fall, this has impacted the interest rates offered. We will continue to closely monitor firms’ future savings rate changes. However, we expect that our interventions to improve competition and support better communications will continue to have a positive impact. Savers who are able to switch should be able to continue to access the best deals.
We found room for improvement in how firms assess the value offered by their savings products. We expect firms to improve these assessments, having considered our feedback, and will take appropriate action where this is not the case.
While we will continue to monitor the savings market, we do not anticipate providing further savings updates unless we identify market-wide concerns in the future. Since July 2024, the Consumer Duty applies to both open and closed products, and we now expect firms to take action in relation to closed book products.
We have also published an update on how firms across the financial services sector have assessed their products and services against the price and value outcome of the Consumer Duty. This outcome sets out that the price a customer pays for a product should be reasonable compared to the overall benefits they get. We have highlighted the good and poor practice we have seen in relation to 3 markets – cash savings, GAP insurance and cash on investment platforms – but the findings will be relevant to all firms who need to demonstrate that their products provide fair value to retail customers.