Many banks and building societies still short changing savers

A recent report has revealed that many banks and building societies in the UK are still short changing savers in terms of interest rates, despite the three quarters of a percent rise since last August. It has been identified that although banks and buildings societies are quick to increase interest rates on borrowing, many are failing to pass on the full benefits of interest rate rises to those with savings accounts and investments, and in some cases are failing to advise customers that they will not receive the full benefit of any interest rate rises enforced by the Bank of England.

A number of banks and building societies have been named and shamed for failing to pass on interest rate rises to savers, including the Alliance and Leicester, ING, Halifax, the Woolwich, Abbey, Lloyds TSB, Nationwide, and Yorkshire. One spokesperson for Woolwich stated: 'We advertise our rates very clearly in the branch and the Press and write to all our customers once a year to inform them of their rate.'

The Bank of England raised interest rates from four and a half percent last August, enforcing a rise of a quarter of a percent, which took the base rate to four and three quarters of a percent. In November of last year the Bank of England raised the interest rate by a further quarter of a percent, taking it to five percent. And in January of this year yet another quarter of a percent was added to the base rate, taking it to five and a quarter percent. Experts are expecting another rise in interest rates within the next couple of months.

In the meantime, savers are advised to check the interest rate on their savings and check to see whether they can get a better deal and a better rate elsewhere.