Promoting consumer interests in the cash savings market

What impact will the Financial Conduct Authority’s (FCA’s) new report on the cash savings market have on lenders? Tim Dolan, partner in the financial markets department at King & Wood Mallesons and Helen McEwan, a trainee in the department, assess the report.

Original news

Savings providers should tell consumers about better interest rates, says FCA, LNB News 20/01/2015 157

Consumers should be able to get the information they need to compare cash savings accounts and then switch providers if they wish, the FCA has said following a market study. The study shows competition in the £700bn cash savings market often does not work well for consumers, particularly those with long-standing accounts. The FCA’s recommendations include asking providers to prominently display the lowest rate of interest any of their customers receives, and clearer information to help consumers compare their savings account with alternative products.

What is the background to the cash savings market study report?

The report, published on 20 January 2015, sets out the FCA’s final findings of its cash savings market study. It highlights aspects of the cash savings market that are not working effectively for retail consumers in the UK and proposes remedies to address those problems. The study focuses on interest-bearing cash savings accounts and covers seven main types of savings accounts:

• easy access accounts
• fixed term bonds
• cash Individual Savings Accounts (ISAs) with no term
• fixed term cash ISA