Manchester-headquartered online savings marketplace Raisin UK has welcomed proposals from the financial watchdog to reform the easy access cash savings market - but warns banks could recover costs elsewhere.
It comes as the Financial Conduct Authority (FCA) today published proposals which would mean firms have a single rate for customers after their accounts have been open for 12 months, before choosing one single easy access rate (SEAR) for its easy access cash savings accounts and one for its easy access cash savings ISAs.
Keven Mountford, co-founder of the German firm's UK arm, said: “We welcome any changes that benefit consumers and the FCA’s proposed changes could help to create a fairer savings landscape for the day-to-day saver but there is always a risk that any cost to the bank is recovered elsewhere.
“We do believe however that competition within the UK market is strong and since the launch of Raisin UK, we’ve been championing the notion that Brits need to shop around for a better deal on their savings interest rate and it is interesting that some believe that switching is complicated.”
The FCA said it had previously raised concerns that competition was not working well for the 40m consumers with easy access savings accounts or easy access cash ISAs.
Christopher Woolard, executive director of strategy and competition at the FCA, said the proposals would “prevent firms from gradually reducing interest rates over time and make them compete for all their customers”.
He said: “We are concerned that many longstanding customers are seeing a poor outcome and we want firms to focus more on these customers.
“The new rate will also make it easier for savers to know whether they are getting a good deal after any introductory offer has expired.”
The FCA is seeking feedback on the proposals by the April 9 deadline.
