Banks too 'scissor-happy' with Isa rates

Isa providers were described as “scissor-happy” over savers’ rates on Monday, as consumer lobby group Which? singled out the worst offenders when it comes to rate cuts.

The group looked at 212 instant-access cash Isas from 21 banks and building societies over the last six years, researching the total cuts made as well as the number of cuts per account.

It found NatWest had the highest number of cuts per account, with eight cuts across two accounts.

The bank’s e-Isa had once earned savers 2%, but it was now giving savers who hadn’t moved their money just 0.25%.

Which? also found that Tesco Bank has made three rate cuts on one account, Royal Bank of Scotland has made two cuts on an account and Barclays has made 13 cuts across seven accounts.

On the other end, Principality Building Society has made just once cut across its five Isas, with West Bromwich continuing to pay customers the same 1.25% to 1.55% rate they signed up for - though those accounts have closed to new business.

“Many savers simply want a provider they can trust to keep their Isa rate competitive,” said Which? Money editor Harry Rose.

“Too many banks are paying truly woeful rates of interest or are scissor-happy when it comes to cutting rates often penalising their most loyal customers.

“Our research shows savers who don't want to have to keep moving their savings about should consider parking their cash with one of the more reliable building societies who have been better at not cutting their rates for existing savers,” he added.