Ten percent of variable savings accounts have rate cuts

Interest rates have been cut on ten percent of variable savings accounts, even though base rates have remained the same.

The rate reductions mean that 48.8% of all variable rate accounts on the market pay bank rate or less, with 22.8% of accounts paying 0.10% or less.

Only 3.5% of savings accounts have rate increases since March, showing that banks are showing little interest in attracting savers.

Research conducted by MoneyFacts has found that the biggest rate cuts have been made by National Counties Building Society which has reduced one of its savings accounts by 0.86%

The Clydesdale Bank has also reduced its rates on saving accounts by between 0.5% and 0.75%.

Commenting on these findings, Michelle Slade from Moneyfacts said: “Savers are already experiencing some of the lowest rates ever and this will be another bitter blow to take.”

“Once again it is savers, such as pensioners, who rely on the income from their savings to supplement their income, who end up worse off.”

“Savers will be asking how providers can justify cutting rates further, when bank base rate has remained on hold.”

“From the beginning of November, new regulations came into effect from the FSA requiring providers to give two months notice, ahead of disadvantageous interest rate changes.

“It appears that a number of providers have pre-empted these changes and reduced rates before the new rules came into force.