The UK’s big banks are continuing to offer easy access savings rates well below the average, according to new Moneyfacts data, despite their continued obligation via the Financial Conduct Authority (FCA) to offer fair value to customers.

Moneyfacts revealed the five biggest banks are all paying less than 2% on their most accessible no-notice accounts, even though over 80% of the market – 292 out of 364 products – currently pay 2% or higher on a £10,000 balance.

These selected accounts, offered by Barclays (1.65%), HSBC (1.98%), Lloyds (1.40%), NatWest (1.74%) and Santander (1.70%), pay an average of 1.69% interest between them. This is down by 1.43% compared to the market average across all currently available easy access accounts.

On top of this, Moneyfacts also suggested these banks’ easy access ISA rates are also less competitive. While HSBC doesn’t currently offer any easy access ISAs to new customers, the remaining four big banks offer an average of 1.62% on their easy access ISAs – less than half the market average of 3.31%.

“Consumer Duty regulations regarding existing products have been in effect since 31 July 2023, meaning companies have had almost a year now to review any previously uncompetitive products, and bring them into compliance with the rules laid out by the FCA,” said Moneyfacts spokesperson, James Hyde.

“Unfortunately, the big five banks are still paying significantly sub-par variable savings rates. Their most accessible no-notice accounts all offer less than 2% interest per annum – putting them all in the bottom fifth of the market.

“Rules regarding closed accounts come into effect this summer, so it remains to be seen if there is more urgency to improve rates going forward.

“As always, customers are encouraged to proactively monitor savings rates, particularly if they’re on a variable rate which providers can adjust on a very reactive basis. People should be prepared to switch if they feel their loyalty is not being adequately rewarded.”

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