Barclays, HSBC, Lloyds Banking Group, NatWest Group and the Financial Conduct Authority have outlined to MPs what work they are doing to improve savings rates for consumers.
Earlier this month, the Treasury Committee asked the chief executives of the UK’s largest banks if all their savings products provide ‘fair value’ to customers, whether customer inertia is being exploited and what steps they’re taking to notify their customers of higher rates available.
All four banks said all customers - both old and new - are being offered the same rates.
In its response, Lloyds said: “We take our obligations under the consumer duty seriously and have made a number of significant enhancements to support our customers, including improving and increasing our communications to help them make informed decisions, such as on the maturity of fixed rate savings products.”
The bank also said it launched a customer engagement plan earlier this year and is in the process of writing to customers who are most likely to benefit from higher earning products within its range.
“This includes customers who have recently matured from a fixed rate product but have not yet taken action; relevant current account holders eligible for preferential rates and those most likely to benefit from the Lloyds Advantage Saver and Halifax Reward Bonus,” it wrote.
Meanwhile, NatWest said it has used its ‘Start to Save’ campaign, launched in February 2020, to help 2mn customers save for the first time, while 600,000 more customers are regularly saving compared to January 2022.
“We also offer MoneySense (a free financial education programme for 5–18 year-olds), ‘Round Ups’ on debit card spend and a free Financial Health Check to our customers,” it wrote.
“We offer our customers a range of products and rates in what is a very competitive market, and we amend the price of products on an ongoing basis to reflect market conditions and our liquidity needs.
“Whilst the BoE rate is 5 per cent, we pay savings rates of up to 5.90 per cent on our two-year fixed product, and 6 per cent (up to £5,000) on our Digital Regular Saver (1.3mn accounts opened since it was introduced in 2020) to encourage customers to build resilience and save for the first time.”
NatWest said it has a set of pricing principles, aligned to the consumer duty, to help guide its decision making.
HSBC said it has worked to enhance its communications strategy, including the ability to nudge customers more frequently where it feels they could be better off using a different product or service, or where it can assist them in making the most of their finances.
Lastly, Barclays said it took proactive action, as early as 2019 and well before the introduction of the new consumer duty, to reduce its product range from 19 (in 2019) to 7 (in 2022) to make it easier for customers to understand what it has on offer.
The bank said it also aligned its “front-book” and “back-book” savings pricing so there is no distinction between older and newer customers and it also eliminated all but two “off sale” products.
