Bonus cut is latest blow to UK's savers

 

Banks and building societies are withdrawing introductory bonus offers on their savings accounts in droves, leaving Britain's army of hard pressed savers to count the cost.

According to financial information site Moneyfacts, since the Bank of England announced a potential injection of £80bn cash into the banking sector, the number of notice savings accounts offering an introductory bonus has been cut by more than half from 23 to just 11. In addition the size of bonuses paid has also been cut from 2 per cent in August to 1.25 per cent today.

Savers are losing out in terms of choice and rate as financial institutions no longer need to attract the same level of cash since the Government's Funding for Lending began in the autumn.

"Providers, who no longer need savers' money to prop up bank balances, thanks in part to the Funding for Lending Scheme, have started streamlining their accounts. We now have less choice than we had four months ago, the rates are very much poorer and to add insult to injury, the introductory bonus has all but disappeared as banks shy away from attracting desperate savers," Sylvia Waycot of Moneyfacts said.

It seems savers are facing their biggest challenge since the onset of the financial crisis to find a good return on their cash. "Every year brings new problems; last year we worried we might forget when the bonus ended on our account and this year we will be lucky to find a bonus. Bonuses gave at least 12 months respite from the historically-low interest rates currently paid. Worryingly, today out of 416 easy access accounts only 46 have a bonus and notice accounts are worse still with only 11 offering a bonus out of 212," Ms Waycot added.

Another victim of the Funding for Lending seems to be savings site Governor Money. The site which acted as middleman between savers and financial institutions has closed to new business as it found it difficult to get big name banks and building societies to offer their savings accounts online.

Anne Bowes, a director of a financial advice site Savingschampion.co.uk, said: "Even though the Government says it is restoring the savings culture it seems to be ignoring the devastating impact that the Funding for Lending Scheme is having on savings.

"Savers are continually being dealt a poor hand, which is an on-going concern especially for the retired who depend on their savings to supplement their income – they have no other way to earn what they need to live on."

Suggested Topics
News
Snoop Dogg pictured at The Hollywood Reporter Nominees' Night in February, 2013
people... says Snoop Dogg
News
i100
Life and Style
fashion Designs are part of feminist art project by a British student
Life and Style
food + drinkZebra meat is exotic and lean - but does it taste good?
PROMOTED VIDEO
News
i100
Arts and Entertainment
Residents of Derby Road in Southampton oppose filming of Channel 4 documentary Immigration Street in their community
tv
Sport
Scottish singer Susan Boyle will perform at the Commonwealth Games opening ceremony in Glasgow
commonwealth games
News
A 1930 image of the Karl Albrecht Spiritousen and Lebensmittel shop, Essen. The shop was opened by Karl and Theo Albrecht’s mother; the brothers later founded Aldi
people
News
Lane Del Rey performing on the Pyramid Stage at Glastonbury 2014
people... but none of them helped me get a record deal, insists Lana Del Rey
Arts and Entertainment
Dwayne 'The Rock' Johnson stars in Hercules
filmReview: The Rock is a muscular Davy Crockett in this preposterous film, says Geoffrey Macnab
Finacial products from our partners
Property search
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Cost Reporting-MI Packs-Edinburgh-Bank-£350/day

    £300 - £350 per day + competitive: Orgtel: Cost Reporting Manager - MI Packs -...

    Insight Analyst – Permanent – Up to £40k – North London

    £35000 - £40000 Per Annum plus 23 days holiday and pension scheme: Clearwater ...

    Test Lead - London - Investment Banking

    £475 - £525 per day: Orgtel: Test Lead, London, Investment Banking, Technical ...

    Business Analyst - Banking - Scotland - £380-£480

    £380 - £480 per day: Orgtel: Business Analyst - Banking - Edinburgh - £380 - ...

    Day In a Page

    Noel Fielding's 'Luxury Comedy': A land of the outright bizarre

    Noel Fielding's 'Luxury Comedy'

    A land of the outright bizarre
    What are the worst 'Word Crimes'?

    What are the worst 'Word Crimes'?

    ‘Weird Al’ Yankovic's latest video is an ode to good grammar. But what do The Independent’s experts think he’s missed out?
    Can Secret Cinema sell 80,000 'Back to the Future' tickets?

    The worst kept secret in cinema

    A cult movie event aims to immerse audiences of 80,000 in ‘Back to the Future’. But has it lost its magic?
    Facebook: The new hatched, matched and dispatched

    The new hatched, matched and dispatched

    Family events used to be marked in the personal columns. But now Facebook has usurped the ‘Births, Deaths and Marriages’ announcements
    Why do we have blood types?

    Are you my type?

    All of us have one but probably never wondered why. Yet even now, a century after blood types were discovered, it’s a matter of debate what they’re for
    Honesty box hotels: You decide how much you pay

    Honesty box hotels

    Five hotels in Paris now allow guests to pay only what they think their stay was worth. It seems fraught with financial risk, but the honesty policy has its benefit
    Commonwealth Games 2014: Why weight of pressure rests easy on Michael Jamieson’s shoulders

    Michael Jamieson: Why weight of pressure rests easy on his shoulders

    The Scottish swimmer is ready for ‘the biggest race of my life’ at the Commonwealth Games
    Some are reformed drug addicts. Some are single mums. All are on benefits. But now these so-called 'scroungers’ are fighting back

    The 'scroungers’ fight back

    The welfare claimants battling to alter stereotypes
    Amazing video shows Nasa 'flame extinguishment experiment' in action

    Fireballs in space

    Amazing video shows Nasa's 'flame extinguishment experiment' in action
    A Bible for billionaires

    A Bible for billionaires

    Find out why America's richest men are reading John Brookes
    Paranoid parenting is on the rise - and our children are suffering because of it

    Paranoid parenting is on the rise

    And our children are suffering because of it
    For sale: Island where the Magna Carta was sealed

    Magna Carta Island goes on sale

    Yours for a cool £4m
    Phone hacking scandal special report: The slide into crime at the 'News of the World'

    The hacker's tale: the slide into crime at the 'News of the World'

    Glenn Mulcaire was jailed for six months for intercepting phone messages. James Hanning tells his story in a new book. This is an extract
    We flinch, but there are degrees of paedophilia

    We flinch, but there are degrees of paedophilia

    Child abusers are not all the same, yet the idea of treating them differently in relation to the severity of their crimes has somehow become controversial
    The truth about conspiracy theories is that some require considering

    The truth about conspiracy theories is that some require considering

    For instance, did Isis kill the Israeli teenagers to trigger a war, asks Patrick Cockburn