The City regulator says it is analysing information provided by some banks and building societies on the value offered by their savings products.
It follows the introduction of the new Consumer Duty in July, which requires firms to ensure the products and services across their range deliver fair value to their customers and act if they do not.
As part of a 14-point action plan previously set out by the Financial Conduct Authority (FCA), the regulator said it would require firms offering the lowest rates to provide their fair value assessments under the consumer duty by August 31 2023 – and take robust action by the end of 2023 against those who cannot demonstrate fair value.
Following concerns that not all savers are getting good deals, the FCA has required nine firms to provide it with their assessments of what value their savings products offer.
The regulator said it will now analyse the information that banks and building societies have provided.
— Financial Conduct Authority (@TheFCA) August 23, 2023
It will publish an update later this autumn, including any steps it might take if it identifies areas of concern.
The FCA outlined the 14-point action plan in July, to ensure people can access a competitive savings market.
The regulator said it is making progress on each of these points and will provide a separate update in the autumn.
Points in the plan include expecting firms to take action to prompt their customers in lower-paying savings accounts or non-interest bearing accounts to consider alternatives.
Since the plan was published, the regulator said it has seen a greater availability of higher interest rates in both term limited and easy access accounts.
It added: “We have also seen moves by some savings providers to align the rates available on accounts currently on sale and those now closed.
“We welcome the development of a more competitive market and encourage people to shop around for the best deal.”
The FCA’s recent cash savings market review found that consumers collectively hold around £1.5 trillion in savings accounts, excluding balances held in NS&I (National Savings and Investments) accounts.
It said Bank of England data indicates that around £250 billion is sitting in deposits which earn no interest.
Around three in 10 adults do not have a savings account of any type – which the FCA said highlights the need to focus on building more consumer financial resilience in the UK.
Sam Richardson, deputy editor of Which? Money, said: “The regulator should take tough action against firms continuing to fall short of the required standards – and this should serve as a shot across the bows to other providers that they must raise their game or face the consequences.”