Savers who want to switch savings accounts to get a better rate should find it “quicker and easier” to do so under new proposals from the City regulator, which would also see firms forced to provide clear information on interest rates on cash savings products, and reduce the time of moving from one cash Isa account to another to within seven days.
The plans, outlined by the Financial Conduct Authority following its review of the UK’s £700bn cash savings market, would mean savers getting clearer information on the interest rate they are getting on cash savings products, and alerts being sent to customers when rates change. For example, they would be informed when an introductory rate came to an end.
Christopher Woolard, director of strategy and competition at the FCA, said: “In a good market, providers should be competing to offer the best possible deal. Consumers should expect the information they need to shop around to be clear and easy to understand. When they wish to move accounts, they should be able to do so with the minimum of fuss.
“Our package of measures are all about giving consumers the information they need to make an informed decision about what to do with their savings, and the ability to act on it quickly.”
Other measures would see the removal of complex jargon, so customers could understand their options more easily, and clearer information about the interest rates that savers are actually receiving. The FCA intends for cash Isa switches to be completed within seven days by January 2017. It will also name firms with accounts that are persistent low payers.
Rachel Springall, Finance Expert at Moneyfacts.co.uk, said: “Moving a savings pot from one bonus rate account to the next is a clever way to take advantage of higher returns, but for consumers who are less proactive, it may mean that they end up sitting on a paltry rate for a long time. These new measures from the FCA will help consumers to plan better, as well as support those who may forget when a long-term investment matures.”
Nationwide Building Society already has a facility which it calls SavingsWatch, where it will update its own savers via text or email if there are any changes to interest rates. The society also welcomed the move.
Andrew Baddeley-Chappell of Nationwide, said: “Savers should have the freedom to switch easily between savings providers and we are supportive of seven day switching for cash Isa transfers. We look forward to the industry continuing to make the switching experience even better so that customers can make the most of the opportunities available to them.”
The FCA is looking for feedback on the proposals, and if you want to comment on the proposals, then send your views by October 2, 2015 via the online response form, or in writing to:
Strategy and Competition Division: Policy
Financial Conduct Authority
25 The North Colonnade
London E14 5HS
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