Belfast Telegraph

Lending scheme 'hits bonus savings accounts'

By Vicky Shaw

Hard-pressed savers will be lucky to find an account paying an introductory bonus this year, a consumer help website has said.

The number of savings accounts offering bonuses has shrunk sharply since a Government scheme aiming to help borrowers was launched, Moneyfacts said.

This comes on top of the choice of savings accounts on the market having fallen since the multi- billion-pound scheme to kickstart lending to households and businesses started in August.

The Funding For Lending scheme offers lenders access to cheap finance but analysts say that it has also made lenders less reliant on attracting customer deposits. There were 470 easy access savings accounts at the start of August last year, of which 73 (16%) paid an introductory bonus, averaging 1.35%.

Now there are 416 such accounts on the market, of which 46 (11%) pay a bonus and the typical bonus rate has dropped to 1.02%.

Sylvia Waycot, financial expert at moneyfacts.co.uk, said: "Providers no longer needing savers' money to prop up bank balances, thanks in part to the Government's Funding for Lending Scheme, have started streamlining their accounts."

Popular