Consumers urged to check savings rates

Consumers need to check their savings rates after some high street banks cut the interest they pay by up to 0.6%, a financial website warned today.

Moneyfacts.co.uk said that although the Bank of England's monetary policy committee cut interest rates by 0.25% on August 4, many savings providers were only just announcing their new rates.

It said Halifax had cut the rates on some of its accounts by 0.45%, while Lloyds TSB and Cheltenham & Gloucester had slashed some of theirs by up to 0.6% this summer.

The group said a number of the smaller building societies had also passed on more than the quarter point reduction to their savers.

But it added that while Alliance & Leicester had reduced the rate paid on some tiers of its Cash ISA by up to 0.5%, it was writing to the customers affected and suggesting they may want to transfer to its Direct ISA which pays a better return.

Andrew Hagger, of Moneyfacts.co.uk said: "Consumers will assume their savings rates will have only been reduced by the amount of the base rate cut.

"Many institutions have published their new rates by way of a notice in the national press, but many people will have missed these and are probably unaware that they may now be receiving up to 0.6% less interest on their savings."

He added: "The best thing to do is take a look at the best buy tables to see if your savings provider is giving you a competitive rate of return on your savings."