Consumer: Watchdog’s calls to ‘scrap the savings trap’

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banks and building societies are being urged to “scrap the savings trap”, after research revealed that only one in five savers know what interest rates they are being paid.

Just 17 per cent of those with savings could pinpoint the exact rate they are on, according to the study by consumer group Which?

The campaign group is now pressing providers to give better information to customers about both what rate they are on, and when any particular bonus or fixed rate comes to an end.

Nearly two-thirds of savers use online banking as a main method of managing their accounts, but Which? said it had found evidence of a “confusing variation” of how rates are displayed, with some banks not putting them up on Internet banking platforms at all.

Which? also uncovered a “wide variation” in terms of how much notice savings providers give for when a bonus rate is about to end.

Out of 18 providers it looked at who offer bonus rates, only 12 contacted customers at least two months before the bonus period ended.

Some providers were found to use passive language such as “you don’t need to do anything” in notification letters at the end of fixed-rate periods.

Which? executive director Richard Lloyd said: “This is further evidence that the savings market isn’t working in the best interests of consumers. With interest rates at a historic low, providers must do more to help their customers find the best deal. They must be crystal clear about interest rates.”

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