Savings deals chopped following Bank of England rate cut

Savers will need to act fast if they want to grab a top rate, as some of the best deals are already disappearing from the market following the Bank of England’s decision to slash rates earlier this week, according to experts.

Moneyfacts.co.uk said that, while it may take months for the market to fully feel the impact of the base rate being cut from 0.75% to 0.25%, some savings deals have already been chopped.

Moneyfacts said several one-year deals sitting towards the top of the “best buys” on the market have been cut.

Those that have changed in recent days include a one-year savings deal from Ikano Bank being reduced from 1.56% to 1.36%, a one-year product from OakNorth Bank being cut from 1.50% to 1.15%, and a previously market-leading one-year bond from BLME being cut from 1.65% to 1.4%.

We are already starting to see savings rates fall after yesterday's base rate cut. To help you get the best rate possible we've published out weekly savings round up a day early https://t.co/54eeNV3IrY

— Moneyfacts.co.uk (@Moneyfacts_couk) March 12, 2020

Many of the major providers have said this week that they are reviewing their deals and will make announcements in due course, although, in a glimmer of hope for savers, Lloyds Banking Group has said changes to savings rates will not reduce by as much as the full reduction in the bank rate.

Rachel Springall, a finance expert at Moneyfacts.co.uk, said: “If savers are looking to secure a decent return over the next year they really need to act fast as savings providers are already cutting some of the best one-year fixed-rate bonds on the market.”

She continued: “Borrowers on the other hand will benefit from the base rate cut if they are sitting on an SVR (standard variable rate) or tracker much more quickly, but they would still be wise to compare details to see if they could save money by moving to a fixed-rate mortgage.”

Here is a summary of what some major mortgage and savings providers have said this week about the base rate cut:

– Lloyds Banking Group

All customers with a mortgage which tracks the bank rate or on a reversionary rate will see will see a reduction of 0.50% by April 1.

The following changes to mortgage reversionary rates will be made by April 1:

Halifax homeowner variable rate at 4.24% will decrease to 3.74%.

Halifax SVR at 4.24% will decrease to 3.74%.

Lloyds Bank homeowner variable rate at 4.24% will decrease to 3.74%.

Lloyds SVR at 2.75% will decrease to 2.25%.

The group said it is reviewing its range of savings rates – and changes to savings rates will not reduce by as much as the full reduction in bank rate.

– HSBC UK

Its SVRs will reduce by 0.50%, alongside on-sale and off-sale tracker reductions of 0.50%.

The bank said its residential SVR would fall to 3.69% and its buy-to-let SVR would edge down to 4.75%.

HSBC said it is reviewing its range of savings products and would update on rate changes in the normal way.

– Santander

It will pass the rate cut on in full, reducing its SVR to 4.49%. The 0.50% reduction will also be reflected across its products linked to base rate including its follow-on rate. The changes will take place from the start of April.

Bradley Fordham, head of mortgages, Santander said this week: “We will be reviewing other rates in the light of the current climate.”

– Nationwide Building Society

Nationwide’s base mortgage rate and standard mortgage rate (SMR) will reduce by 0.50% to 2.25% and 3.74% respectively from April 1.

Borrowers on a tracker mortgage will also see their rates reduce by 0.50%.

The society said it is reviewing its savings rates and will make an announcement in due course.

– RBS Group

Its SVR will reduce by 0.5% from 4.24% to 3.74%, effective from April 1.

For customers of Royal Bank of Scotland, NatWest and Ulster Bank Northern Ireland, it is also reducing the rates on a number of savings and deposit products.

The new rates will take effect between April 20 to June 20, depending on the product.