Single Easy Access Rate for cash savings

The FCA is certainly right to acknowledge that many consumers do not shop around, and others may have stayed with their provider due to loyalty or convenience and have been penalised by lower interest rates as a result. However, the regulator appears not to have sufficiently recognised that there are many consumers who have made an informed choice to stay with their existing provider for many years because they have consistently provided amongst the highest levels of interest.

AAT recommends that the FCA avoids further unintentional consumer detriment as has recently occurred with changes to overdraft fees. These overdraft changes compelled lenders to cut very high daily fees in favour of a simple, annual interest rate, in order to assist consumers in comparing costs. However, lenders have inevitably sought to protect their profits and simply increased fees for other account holders who use an agreed overdraft, meaning greater charges for more than eight million consumers.

Given the FCA estimates the introduction of a SEAR is estimated to cost lenders anywhere between £148 million and £381 million, the obvious question is how and where will lenders seek to recoup these costs?