BANKS and building societies have increased savings rates after the Bank of England hiked interest rates.
The central bank unexpectedly increased its base rate by 0.5 percentage points, the sharpest increase since February.
Banks have been accused of not passing higher interest rates on to saversGetty
The rate is used by high street banks and lenders to set the rates it offers customers on mortgages, loans and savings.
A rate rise is generally good news for savers, especially after a long stretch of getting very low returns.
But some banks are failing to pass on higher interest rates to their customers.
MoneySavingExpert (MSE) founder Martin Lewis has said said it seems “absolutely outrageous” that the rates savers are sitting on are lagging behind the rates being charged to borrowers.
Speaking on ITV’s Good Morning Britain, he said: “They’re putting borrowing up, but they’re not putting savings up by the same amount.
“That seems absolutely outrageous to me, because when the banks were struggling in 2007/2008, we, the state, the taxpayer, bailed them out.
“We, the state, the taxpayer are struggling right now.
“They should be doing what they can in return, because they’re too big to fail and, now, they don’t want us to fail.
“They should be doing what they can in return.”
The increase yesterday was expected by some economists after shock inflation figures were revealed earlier in the week.
It comes as the BoE chief Andrew Bailey has been blasted for being too slow to act to combat inflation.
Writing in The Sun, Trevor Kavanagh argued that Andrew Bailey has failed to control inflation.
While, ex-Business Secretary Jacob Rees-Mogg accused Mr Bailey of “burying his head in the sand”.
But some banks are opting to pass on the latest increase in interest rates to their customers.
We list the bank major banks and building societies that will be hiking their rates following the BoE announcement.
Skipton Building Society
Skipton Building Society said that the average uplift on all variable saving accounts will be 0.37%.
But it said that some savers get the full 0.50% increase.
This means variable account rates will start at 3%.
Skipton Building Society’s chief executive of Money, Andrew Bottomley said: “We’re really proud that we continue to offer above-market savings rates to our members, and in 2022 alone, we gave more than £100m back to Skipton savers.
“Today’s Bank of England base rate rise gives us the opportunity to give even more back, an opportunity we think it’s right to take.”
Lloyds Bank
Major high street bank Lloyds Bank has increased rates for fixed rate savings accounts.
Rates on a one-year fixed rate cash Isa has increased by 50 basis points to 4.95%.
While a two-year fixed rate cash Isa has gone up by 45 basis points to 5%.
Meanwhile, a one-year online, fixed bond will increase by 50 basis points to 4.95%.
A two-year fixed bond has gone up by 45 basis points to 5%.
Lloyds said it is keeping all its other rates under review.
Natwest
Another big name increasing its savings rates in Natwest.
It has increased rates on a range of products, including its Digital Regular Saver, Flexible Saver and its Isa products.
Customers with more than £5,000 in a Digital Regular Saver will see rates increase from 1% to 1.11%.
While those with over £25,000 or more in a cash Isa will now benefit from rates of 2.63% up from 2.53%.
Santander
Santander has said its customers with a savings account linked to the BoE base rate will see their interest increase by 0.5% from July 3.
These include the Rate for Life and Good for Life savings accounts.
The bank says it is reviewing its other products and will contact customers if it makes any changes.
Halifax
Rates on a one-year fixed saver account with Halifax has increased by 50 basis points to 4.8%.
While interest on a two-year fixed account has risen to 4.85%.
The rate on a one-year fixed Isa is 4.8%, while a two-year fix is now 4.85%.
What are other banks doing?
Leeds Building Society
The majority of Leeds Building Society savers are on fixed rate products, a spokesperson told The Sun.
This means that their rates will remain the same until their fixed periods end.
Barclays
Following the BoE increase, Barclays said it is reviewing its rate and will inform customers of any changes in the near future.
HSBC
HSBC said its savings accounts are not directly linked to the base rate and that it regularly reviews its rates based on swap rates and market conditions.
Virgin Money
A spokesman for Virgin Money told The Sun that it has not many any changes following the BoE announcement.
Nationwide
Nationwide said it is reviewing its rates and will let customers know if it makes any changes.
TSB
Like Nationwide and Barclays, TSB is also keeping its rates under review.
The Sun has also contacted Metro Bank to see if it has made any changes to its savings rates following yesterday’s BoE announcement.
How can I find the best savings rates?
With your current rates in mind, don’t waste time looking at individual banking sites to compare rates – it’ll take you an eternity.
Research websites like MoneyFacts and price comparison websites such as Compare the Market, Go Compare and MoneySupermarket will help save you time and show you the best rates available.
These sites let you tailor your searches to an account type that suits you.
It’s also worth considering opening an Individual savings account (Isa).
These can pay high interest but come with high withdrawal fees and are unlikely to be beneficial if you’ve less than £65,000 in savings.
However, Lifetime Isas are great for anyone aged 18-39 hoping to buy a house or save for retirement.
Meanwhile, we revealed the full list of banks not hiking mortgage rates despite yesterday’s jump.
Do you have a money problem that needs sorting? Get in touch by emailing [email protected]