The FCA will report on how well the cash savings market is supporting savers to benefit from higher interest rates. We will require the largest banks and building societies to explain the pace and extent of their pass through of interest rates, and how they are proactively supporting customers to switch to high interest rate products that might be suitable.
We have also joined forces with other regulators to call on firms[1] to support customers struggling with the increased cost of living and to keep prices fair for customers.
When supporting consumers in difficulty, firms should recognise that they’ll have multiple bills to pay, and be proactive in raising support available to them. This approach was agreed at a roundtable hosted by the Chancellor this morning and it builds on the wide range of actions the FCA has already taken to support consumers struggling with the cost of living.
Speaking after the roundtable Nikhil Rathi, Chief Executive said:
'We’re doing all we can to ensure that people who are struggling, often with multiple bills, get the support they need.
'At the FCA we’ve worked with firms to deliver £47 million in compensation to over 195,000 struggling customers. We’ve introduced rules which have saved almost £1 billion in overdraft charges. And we’re working quickly to implement the commitments firms made on mortgages last week.
'We’re monitoring the experience of consumers closely – including how savers are benefiting from higher interest rates. We’ll take swift action if firms aren’t doing all they should to help people dealing with tighter household budgets.'
Our work to help consumers to date includes:
- We reminded 3,500 lenders how we expect them to provide tailored support to borrowers[2] who get into financial difficulty.
- We’ve worked with nearly 100 lenders to improve the way they treat customers[3]. So far, 17 of these firms have agreed to pay out up to £47 million in compensation to over 195,000 customers.
- We set out what more mortgage lenders can do[4] to help customers worried about keeping up with payments. We’re also working quickly to update our rules to support the lender commitments made to the Chancellor on 23 June.
- Our work to simplify overdraft charges and to tackle high unarranged overdraft fees has saved people across the UK almost £1 billion.[5]
- We’ve warned banks[6] to improve the way they treat small business owners when collecting and recovering debts.
- We warned insurers[7] to protect customers, including by avoiding unnecessary products or add-ons and unfair penalties and ensuring consumers get access to fair value products.
- We’ve banned providers of debt advice from receiving referral fees[8] from debt solution providers, saving consumers struggling with debt thousands of pounds in unnecessary fees and ensuring they receive better quality advice.
- We have challenged firms[9] to ensure they are treating their customers fairly when setting savings rates. Our Consumer Duty will set the expectation that firms should be able to explain and justify their pricing decisions. This includes how quickly they raise savings rates and being able to demonstrate that rates offer fair value.