The Money Stop

The recent 0.25 per cent interest rate rise was bad news for borrowers but was more warmly received by savers.

The Bank of England’s decision to increase the base rate to 5.5 per cent should mean that savers earn more interest on their money.

However, the Post Office is warning that many people are not benefiting because banks and building societies are failing to pass on the new rates.

“It’s easy to become a base rate loser when account providers fail to pass on interest rate rises in full to their customers, leaving people hugely out of pocket,” revealed Richard Norman, head of savings at the Post Office.

“Interest rates have risen sharply over the last year, and many experts believe there are further hikes to come.

“As people tighten their belts due to rising mortgage payments, they should make sure any money they have in savings is working as hard as it can for them,” he added.

The Post Office claims that many of the largest high street banks and building societies are failing their customers in this way and the financial losses can be huge.

The firm points out that a saver with £5,000 in a typical instant access savings account may have lost out on £145 in interest if their bank has not implemented the one per cent rate rise we have witnessed in the past year.

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