Savers hit with lower interest as FLS kicks in

Ben Southwood
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RS have come in for an interest rate hammering, as account providers have slashed rates since the Funding for Lending Scheme (FLS) kicked in last August.

In January so far, 100 accounts have seen their interest rate chopped, according to data released by the Savingschampion website yesterday, adding to the 64 cuts in the previous four months.

The website puts the plunges down to a reduced demand for deposits – with providers switching to easily available cash from the FLS, instead.

“No one is immune from the savings rate slaughter,” said director Anna Bowes. “New and existing savers have seen their rates plummet in recent months – things have truly gone from bad to worse and there’s no clear end in sight.”

The 100 cuts this month, from 16 providers, take on average 0.4 per cent from the rates they change, with the biggest snip coming to a full percentage point.

“The FLS has simply been disastrous for savers,” Bowes said. “We urge the government to recognise the knock-on effects this scheme has had on savers.”