THREE building societies finally pass on some of the base rate rise to savers

Following the Bank of England’s base rate increase last month, three of Britain’s largest building societies are increasing interest rates for a variety of savings deals.

Newcastle, Skipton, and Yorkshire Building Societies have approximately 4 million members between them. They have all announced rates that will go up starting 1 February.

But, they are all only increasing the interest rates of some of their savers, specifically those who have variable deals.

Savings at variable rates are not eligible for the benefit. In most cases, however, the base rate hike of 0.15 percentage points won’t pass on to savers.

Newcastle Building Society is the only one to claim that it has received 0.15 percent of the increase.

All rate increases will take effect on February 1, just seven weeks after Bank of England raised the base rate by 0.1 percent to 0.25 percent.

Yorkshire Building Society is home to nearly three million members and will increase its variable rates by 0.1% starting February 1.

This means its best paying easy-access deal will rise from 0.4 per cent to 0.5 per cent, whilst its best paying easy access cash Isa deal will increase from 0.35 per cent to 0.45 per cent.

Chris Irwin from Yorkshire Building Society is director of savings.

“With no outside shareholders to satisfy, we have protected savers the farthest possible over the prolonged period of a low Bank Rate. We also maintained an average interest rate for our accounts that has consistently been higher than the market.

“Our decision to today increase our variable rate account continues our mutual ethos that puts our members first.”

Skipton Building Society with over 1 million members has also decided that it would increase its variable rate in response to the rate changes. They claim over half of a million customers have received rate increases.

The average rate increase for those members who have their rates increasing is 0.12 percent, and the average variable rate will rise after this change to 0.40 percent.

Skipton’s Triple Access Saver will increase from 0.61 percent to 0.7 percent.

This will be the best-paying easy-access deal available, although it restricts savers only to three withdrawals each year.

Newcastle Building Society has over 300,000. It also stated that the rate hike will be applied to most of its variable-rate savings products.

According to the company, 97 percent of variable-rate savings members will be able to benefit from an increase in their rate of 0.15 percent.

This includes its easy-access saver which is currently paying 0.15 per cent on deposits up to £250,000. The account will be paid 0.3 percent as of February 1, 2019.

Two of the highest-paying variable rate savings products, which are its most valuable, will not be affected by these changes. It confirmed that its Triple Access Saver, and Monthly Access Saver products, won’t face any rate changes at this moment.

How about other major names?

Due to their customer-focused focus, all member-owned organizations might have an advantage by immediately raising their savings rates following last month’s base rate increase.

Despite the fact that three of them are doing this, Nationwide and Coventry as well as Leeds, Leeds, Principality Building Society, are yet to change.

Nationally, Britain’s most important building mutual is still a secretive affair with 16 million members.

One spokesperson stated that they are still trying to understand what the bank rate hike means for savers. They will also announce any future changes as soon as possible.

Nationwide’s Flex Instant Saver is an easy-to-access offer that pays 0.35 percent, while its 1-year Triple Access Saver pays 0.45 percent.

Nationwide, Britain’s largest Building Society is still to raise savings rates due to the rise in base rate.

The Principality, which is home to over 500,000 members, was also non-committal about the issue of raising rates.

Morgan Miles is the head of product pricing at Principality Building Society. He stated: “We’ve been spending time understanding what the Bank Of England change in interest rates means for our members, our products, so we’ll give an update to our members over the next few weeks.

Principality’s online restricted access deal offers customers the ability to withdraw funds up to three times per year and pays 0.55 %, while its easy access deal charges 0.25 %.

Leeds Building Society is home to approximately 750,000 members and says that it’s still “reviewing” the effects of the rise in base rates.

One spokesperson stated that: “As building societies, it is important to balance the needs for savers as well as borrowers. We have worked hard in low interest rates to provide long-term value for both.

The majority of Leeds Building Society savers or borrowers have fixed rate products. Their rates will stay the same up to their end, so they won’t change.

Leeds currently offers a 0.6% online easy-access account, giving it credit. It features in our best buying tables.

The bank currently charges 0.15 percent for easy-access savings and 0.5% to double access savers that allow savers to withdraw twice per year. 

Coventry Building Society has also stated that it does not plan on increasing rates to compensate for the increase in base rates.

One spokesperson stated that in 2021, we would pay our savers less than the rest on the market.

“Maintaining high savings rates, even when other people cut them to nearly nothing is a sign of our long-term commitment to saving.”

Coventry’s Limited Access Saver allows customers to withdraw as many times as they wish each year. It currently pays 0.5%, while its simple-access saver pays 0.3%.