FCA cracks down on big banks and their slowness at passing on base rate rises to easy-access accounts

As part of its action plan, the FCA:

1. Require businesses offering the lowest rates to provide their Consumer Law assessments of fair value by August 31, 2023 and crack down by the end of 2023 against those that cannot demonstrate fair value.

2. Review the timing of the changes in the savings rate of companies every time there is a change in the base rate.

3. Publish a six-month analysis of companies’ easily accessible savings rates, listing the distribution from best to worst.

4. Analyze the gap between on-sale and off-sale products, challenging companies to explain how large differences offer fair value and considering additional actions if this gap does not continue to close.

5. Review the performance of companies in the change from ISA in cash to ISA in cash.

6. Conduct further analysis on the contribution of cash savings to business profitability.

7. Review the effectiveness of companies’ engagement with customers by the end of March 2024 and take action if companies have not effectively achieved the results set out by the FCA.

8. Work with others, including the Money and Pensions Service, to identify what more can be done to help consumers save regularly, strengthening their financial resilience.

The FCA expects companies to:

9. Starting today, use their fair value assessments of savings products for sale to assure themselves and the FCA, where necessary, that they represent fair value to customers.

10. Expedite your fair value assessments for off-sale accounts by the July 2024 consumer tax deadline for off-sale accounts.

11. Take steps to encourage your customers in lower paying savings or non-interest bearing accounts to consider alternatives.

12. Closely monitor the effectiveness of client communications, with larger firms providing the FCA with an assessment by the end of 2023 and any follow-up action they are taking.

13. Support the financial resilience of consumers by encouraging them to start saving and/or seek higher rates, with the largest firms pledging to support a specific firm-by-firm communication campaign.

14. Consider how you can help your clients access the free advice available from MoneyHelper.