{"id":27298,"date":"2024-10-10T10:09:54","date_gmt":"2024-10-10T09:09:54","guid":{"rendered":"https:\/\/smh.group\/?p=27298"},"modified":"2024-10-10T10:09:54","modified_gmt":"2024-10-10T09:09:54","slug":"fca-warns-savers-to-watch-for-hidden-bank-tactics","status":"publish","type":"post","link":"https:\/\/devstagesite.co.uk\/smhgroup\/fca-warns-savers-to-watch-for-hidden-bank-tactics\/","title":{"rendered":"FCA Warns Savers to Watch for Hidden Bank Tactics"},"content":{"rendered":"

The Financial Conduct Authority<\/a> (FCA) has released a review of the cash savings market after uncovering evidence of questionable tactics being used.<\/strong><\/p>\n

While the use of paper cash is declining as a means of payment, the need to retain a cash reserve remains as strong as ever. We all need some \u2018rainy day\u2019 money in case of sudden expenses, from car repairs to the proverbial broken boiler (or heat pump). There is no universally agreed figure about how much we need, although \u2018peace of mind\u2019 figures between three and six months of income or regular outgoings are often suggested.<\/p>\n

The latest data from the Bank of England shows that many of us appear to be holding much more than the six-month figure. Total household deposits amount to about \u00a31,900 billion, or over an average of \u00a365,000 per household. Viewed another way, it is enough stockpiled cash to clear about two-thirds of all government debt.<\/p>\n

The size of the household cash mountain and Bank of England interest rates, which have been rising until recently, suggests why the FCA is paying growing attention to the rates being paid to depositors. As the table below from a September FCA report demonstrates, the gap between the official interest rate and average easy access rates is wide. The result is that the big banks have seen strong earnings, something which the Chancellor might seek to tax further in her forthcoming Budget.<\/p>\n

Average easy access deposit interest rates and base rates at quarter end<\/strong><\/p>\n\n\n\n\n\n
\u00a0<\/strong><\/td>\n31 July 2023<\/strong><\/td>\nQ3 2023<\/strong><\/td>\nQ4 2023<\/strong><\/td>\nQ1 2024<\/strong><\/td>\nQ2 2024<\/strong><\/td>\n<\/tr>\n
Average rate<\/strong><\/td>\n1.66%<\/td>\n1.96%<\/td>\n2.03%<\/td>\n2.12%<\/td>\n2.11%<\/td>\n<\/tr>\n
Base rate<\/strong><\/td>\n5%<\/td>\n5.25%<\/td>\n5.25%<\/td>\n5.25%<\/td>\n5.25%<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

Source: Financial Conduct Authority <\/em>\u00a0<\/strong><\/p>\n

The FCA\u2019s report highlighted three areas to watch if you have, or plan to, place money on deposit:<\/p>\n