Three of Britain’s biggest building societies will increase the interest rates on a number of savings deals, following last month’s Bank of England base rate rise.
Newcastle, Skipton and Yorkshire Building Societies, which between them have roughly 4million members, have announced that rates will head upwards as of 1 February.
However, all three are only upping interest rates for some of their savers – namely those on variable deals.
Only savers on variable rates stand to benefit and in most cases the full 0.15 per cent base rate rise won’t be passed on.
Furthermore, only Newcastle Building Society claim to be passing on the 0.15 per cent rise in full.
The rate rises will all take effect from 1 February – almost seven weeks after the Bank of England lifted the base rate from 0.1 per cent to 0.25 per cent.
Yorkshire Building Society, home to almost three million members, will be hiking its variable rates by 0.1 per cent from 1 February.
Chris Irwin, director of savings at Yorkshire Building Society, said: ‘It has been a tough few years for savers so we’re delighted to be able to increase our savings products at the same time as protecting our borrowers from the increase.
‘With no external shareholders to satisfy we have protected savers as far as possible during the extended period of a record low Bank Rate, maintaining an average interest rate on our accounts which has been consistently higher than the market average.
‘Our decision today to increase our variable rate accounts continues to reflect our mutual ethos of putting our members first.’
Skipton Building Society, which has over 1million members, has also decided to up its variable rates in light of the base rate change and claims that over half a million customers are getting rate increases as a result.
It states that the average rate rise is 0.12 per cent for members whose rates are increasing and its average variable rate after these changes will be 0.40 per cent.
Most notably, Skipton’s Triple Access Saver will rise from 0.61 per cent to 0.7 per cent.
As it stands that will make it the best paying easy-access deal on the market – albeit limiting savers to three withdrawals a year.
Similarly, Newcastle Building Society, which has more than 300,000 members, says it will apply the full rate rise to the majority of its variable rate savings products.
It claims that 97 per cent of members with a variable rate savings product will benefit from a rate increase of 0.15 per cent.
This includes its easy-access saver which is currently paying 0.15 per cent on deposits up to £250,000. As of 1 February, this account will pay 0.3 per cent.
However, two of its highest paying variable rate savings products will remain unaffected by the changes, after it confirmed its Triple Access Saver and Monthly Access Saver products won’t be subject to a rate change at this time.
What about the other big names?
Given their focus on customers, it was expected that all these member-owned organisations might score an advantage over their banking rivals by immediately pushing up savings rates in the wake of last month’s increase in the base rate.
Yet, whilst three are now doing so, Nationwide, Coventry, Leeds and Principality Building Society are all yet to make any changes.
Nationwide, Britain’s largest building mutual by a considerable distance with more than 16million members is remaining tight lipped on the matter.
A spokesperson said: ‘We are still working through what the bank rate increase means for savers and will announce any changes in the near future.’
Britain’s biggest Building Society, Nationwide is yet to increase savings rates in light of the base rate rise.
Principality, home to more than 500,000 members was similarly non-committal on the question of when it will boost rates.
Morgan Miles head of products and pricing at Principality Building Society said: ‘We have been taking time to understand what the Bank Of England interest rate change means for our members and our products, and we’ll share an update with more information to our members in the next few weeks.’
Leeds Building Society, home to roughly 750,000 members, also says it is still ‘reviewing the impact’ of the base rate rise.
A spokesperson said: ‘As a building society, it’s important for us to balance the needs of savers and borrowers, and we’ve worked hard in this low interest rate environment to offer long-term value to both.
‘The majority of Leeds Building Society savers and borrowers are on fixed rate products. Therefore, their rates will remain the same until their fixed periods end.’
To give Leeds some credit, it is currently offering one of the more generous online easy-access accounts paying 0.6 per cent, which features in our best best buy tables.
|Type of account (min investment)||0% tax||20% tax||40% tax|
|Accounts WITHOUT bonus – These rates are not boosted by a temporary bonus that drops off after a year|
|Newbury BS welcome to Newbury (£50+) (1)||0.75||0.60||0.45|
|Skipton BS Triple Access 3 (£5,000+) (4)||0.61||0.49||0.37|
|Coventry BS Limited Access Saver 4 (£1+)(3)||0.50||0.40||0.30|
|Leeds BS Double Access Saver (£1,000+) (2)||0.50||0.40||0.30|
|Swansea BS Instant Access Saver (£1+)||0.50||0.40||0.30|
|(1) Only available in Newbury and surrounding areas|
|(2) You hare limited to making two withdrawals a year. If you make more withdrawals you lose 30 days’ interest on the money withdrawn|
|(3) You are limited to making six withdrawals a year|
|(4) You are limited to making three withdrawals a year|
Coventry Building Society similarly has no plan to increase rates in light of the base rate rise.
A spokesperson said: ‘In 2021 we paid our savers more on average than the rest of the market.
‘Maintaining higher savings rates when others cut them back to almost nothing shows our commitment to savers over the long term.’
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