FCA proposes basic savings rate for cash accounts

Concerns over low interest rates on certain accounts

The Financial Conduct Authority (FCA) has published a discussion paper setting out a range of options to address price discrimination issues faced by customers in the cash savings market.

Its Discussion Paper comes in response to concerns that interest rates are lower on easy access cash savings products for longstanding customers than for those who shop around. The FCA is now calling for input on how to address the harm caused by this 'price discrimination' and has set out a range of options to address this issue, including introducing a basic savings rate (BSR). This BSR option would apply to all easy access cash savings accounts and easy access cash ISAs after they have been open for a set period of time, such as a year. Christopher Woolard, executive director of...