Text Alerts Could Warn On Low Savings Rates

Text alerts and emails could be sent to savers who fail to act on low rates, as the City watchdog moves to better protect long-standing bank customers.

The digital alert idea is one being considered by the Financial Conduct Authority (FCA) as it publishes, for a second year, a list of the lowest rates being offered through easy access accounts - again finding rates as low as 0.01%.

That equates to interest of just 10p on a balance of £1,000.

As part of its effort to encourage action among consumers, especially those who have failed to act against low rates by switching, firms - from December - will have to provide easy-to-understand information in a summary box to help consumers compare savings accounts.

They will also have to provide clearer details on changes to interest rates or the end of an introductory rate and provide a quicker and easier switching process to those who want to change their provider or account, the FCA said.

Christopher Woolard, its director of strategy and competition, said: "We said that one of our priorities this year will be focused on the treatment of long-standing customers.

"Our new rules, coming into force at the end of the year, will help consumers get the facts they need to make an informed decision about what to do with their savings.

"In a well-functioning market, providers should be competing to offer the best possible deal to consumers. Our sunlight remedy data shows that some consumers could be better off by opening a different account".

The digital alerts have been subjected to trials - alongside other possible measures in written communications including switching boxes - outlining potential gains of changing provider or account.

Another idea is attaching a pre-paid switching form letters to improve ease of switching accounts (Other OTC: UBGXF - news) .