The Treasury Committee has written to several lenders and widened its campaign for firms to increase the savings rates offered to loyal customers.

In new correspondence, the cross-party Committee of MPs has questioned Nationwide, Santander, TSB and Virgin Money on their easy access savings accounts.

The Committee has asked the firms why savings rates are much lower than the current interest rate, how the banks and building societies determine the level of interest rate increases to pass on to savers, and whether they inform their loyal customers that higher alternatives may be available.

Collectively, these banks and building societies, defined as “scale challengers”, account for a quarter of all personal current accounts, according to figures from the Financial Conduct Authority (FCA).

The Committee said its correspondence follows results announcements from the “big four” banks – Barclays UK, HSBC UK, Lloyds Banking Group and NatWest Group – all of whom reported strong growth in net profits.

When the Committee began its inquiry into retail banks in February, these four banks offered between 0.5 and 0.65% easy access savings rates. Today, the big four are offering rates between 0.7 and 1.3%.

The Bank of England (BoE) base rate is currently 4.25%, with the next decision on interest rates due this week.

Chair of the Treasury Committee, Harriett Baldwin, said: “Recent results announcements show that the UK’s biggest banks are continuing to squeeze record profits from their loyal savers. In a high interest rate environment, and with further BoE base rate rises possible, banks must do more to encourage saving.

“As a Committee, we would like to know why savings rates offered by banks and building societies are so much lower than the current base rate, and whether banks tell their loyal customers better deals could be available. We are concerned that the loyalty penalty may be particularly severe for elderly or vulnerable customers who may not be able to take advantage of higher rates available online.

“Consumers should continue to vote with their feet and find better offerings. This, more than anything, will drive the banks to increase their currently measly rates.”

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