The Treasury Commission of the British Parliament has sought an explanation from TSB (Sabadell) and Santander UK as to why they are not paying their customers for savings through accounts or deposits, now that interest rates in the United Kingdom are already up to 4.5%. have reached The commission, made up of members from different political parties, has sent a letter to four banks in the country asking them to increase the existing remuneration, which they consider “a pittance”.
In the letter, the Treasury has asked Santander UK, TSB (Sabadale), Nationwide and Virgin Money to explain why the interest they pay on their customers’ savings is much lower than the reference interest rate set by the Bank of England, and that also asks these institutions whether they inform their customers about other options to get higher returns on their money, if they offer them the most suitable savings option and highest interest rate.
According to the Financial Conduct Authority (FCA) data, research by the British Treasury suggests that these four institutions hold a quarter of all personal bank accounts in the United Kingdom. For this reason, lawmakers and regulators have expressed concern that retail banking is not as competitive as it should be.
According to the Treasury, the Virgin Money savings account offers a return of just 0.25%; Santander offers 0.7% and TSB offers 0.9%. Although Nationwide offers the highest interest, 1.25%, it is still a far cry from the Bank of England rate of 4.25% (when the study was conducted) which is now 4.5%.
In a statement, the chair of the Treasury Committee, Harriet Baldwin, indicates that bank customers should be able to find better offers, not the “pathetic current rates” that institutions are paying. Also remember that the rate hike has boosted the income and margins of these big four retail banks, giving them “extraordinary profits” that should change their commercial policy.
“The results show Britain’s biggest banks are making record profits thanks to their savers. In an environment of high interest rates, and with a potential hike by the Bank of England, banks must do more to encourage savings” , he remarked.
“As a committee we would like to know why the interest these banks pay for savings is so much lower than the current base rate, and if the banks tell their customers that better offers may be available. We are concerned that the penalty Can be particularly severe for older or frail customers who cannot take advantage of the higher rates.
An office of TSB, a subsidiary of Banco Sabadell, in London
According to various British media, Nationwide publicly responded to the letter, defending that “they offer a solid and competitive range of savings products” and that, in addition, they are committed to paying the best interest rates. which they can afford in a sustainable manner. “In recent months, our average deposit rates have been at least 42% higher than the market average,” he says.
Virgin Money also defends that they already offer “a wide range of savings accounts” and that they have increased savings’ remuneration to guarantee that they offer a “competitive and market-leading option”. has a “regular increase”. Subsidiaries Banco Sabadell and Santander UK have yet to comment.
Customers also ask for clarification in Spain
In Spain, the Union of Financial Users (Asufin) on Monday denounced that large institutions have not entered the liability war despite the fact that the rate hike “has not stopped and has already reached 3.75%”. ” The association’s president, Patricia Suarez, said in a statement: “We cannot understand why large Spanish institutions continue without prepayment deposits, while financing becomes more expensive and mortgages are updated with significant increases due to Euribor. Is.”
Suárez recalls that our country is “on the bottom rung of accumulated wages” compared to neighboring countries. According to the latest data from the European Central Bank, the average in the euro zone is 2.09%, while in our country it drops to 1.36%. In contrast, France pays an average of 2.83% on deposits; Italy, at 2.82%, and Belgium, at 2.48%.
“The only option left to the conservative Spanish saver who shows a preference for a vehicle without risk or complexity, such as a deposit, is to move to smaller institutions; Foreigners who do not have a large scale branch in our country, or do it through online channels”.
The Bank of Spain has also highlighted on several occasions that our country is paying the lowest in Europe for savings. In their annual report – presented just a few days ago – they confirmed that Spanish banks are not accumulating interest rate hikes at the same rate they do, nor at the same rate as they do in Europe. Are. Well, in some countries the translation is complete and here only 0.5%.