Bankers summoned to watchdog as savings rates trail mortgage costs
The chief executives of HSBC, NatWest, Lloyds and Barclays are expected before the Financial Conduct Authority.
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Your support makes all the difference.Top bankers have been summoned to a meeting with the financial watchdog to discuss concerns surrounding interest rates for savers lagging behind the cost of mortgages.
The Financial Conduct Authority (FCA) expects chief executives from HSBC, NatWest, Lloyds and Barclays to attend on Thursday amid allegations of “blatant profiteering”.
But sources were playing down the likelihood of a charter being drawn up in the vein of the one agreed between Chancellor Jeremy Hunt and the big mortgage lenders.
The high street banks are squeezing higher profits from their loyal savings customers
MPs on the Treasury Committee were stepping up their campaign to increase saving rates for lenders, which are failing to keep up with soaring mortgages.
They wrote to the four biggest lenders demanding answers to their concerns that saving rates are “too low” in the light of the base interest rate reaching 5%.
Dame Andrea Leadsom, the former Cabinet minister who sits on the committee, said that “it’s quite clear they have failed to pass on the rise in interest rates to savers”.
Colleague Dame Angela Eagle added: “This blatant profiteering has been shocking, and it’s clear to me this behaviour is miles away from the incoming requirement for firms to treat their customers fairly and with respect.”
From the end of July, a new consumer duty will be introduced to force financial firms to put consumers at the heart of what they do.
The average easy access savings rate on the market is at 2.43%, according to financial information website Moneyfactscompare.co.uk, while savers looking for a one-year fixed-rate account can get 4.82% typically.
But the average two-year homeowner mortgage rate on the market is 6.42%.
Ministers have also been concerned about the issue, with Work and Pensions Secretary Mel Stride acknowledging there are “questions to be asked” of the banks.