Savers lose out again with Barclays
February 8, 2008
Savings customers with Barclays Bank have been left seething after the banking giant cut interest rates on savings again, stinging savers for the third time in just a few months. In December the Bank of England cut its base rate by 0.25%. However this has been the only base rate cut in over two years and followed a series of five interest rate increases between August 2006 and July 2007. Despite this, Barclays has cut its savings rate by 0.74%, which is nearly three times the amount by which the base rate has been cut during this time.
One industry official from Moneyfacts.co.uk said that the move by Barclays was a disappointing one. She stated: ‘While other institutions opted for the same two-prong rate reduction, just prior to and following December’s rate cut and others changed rates in December by more than the base rate, the maximum cut we have seen so far was 0.55%. Barclays truly stands out from the crowd with a cut almost three times that of base.’
She also added: ‘With another base rate cut imminent, savers must ensure they get a good deal on their savings rates. The savings market is still healthy with great rates to be found. So some savers are getting a great deal and have the bonus of not having seen any rate reduction, while others suffer as already average rates are slashed despite the base rate remaining on hold.’
However, Barclays officials stated that their savings products were still good value, stating: ‘We believe that our products are still competitive within their markets.’ In the meantime, savers have been warned to look for competitive fixed rate savings accounts before banks cut rates further in light of further expected interest rate cuts.
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