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The week in savings - w/e 8th October

Monday 4th October

Oxbury Bank made the first move of the week with changes to their fixed rate pricing:

1 Year - 1.30% (drops down to joint 9th)
18 Months - 1.35% (drops to joint 5th)
2 Year - 1.50% (up to joint 10th)
4 Year - 1.70% (up to 4th)
5 Year - 1.71% (up to 9th)

Redwood Bank published their 2020 accounts showing that it grew savings balances 64% during the financial year to £379.6m, which was entirely from business savings.


Tuesday 5th October

Furness Building Society made the first change of the day - increasing their 2 Year Fixed ISA to 0.95% to move up to 10th in the market

Secure Trust Bank withdrew their 1 and 2 Year Fixed Rate Bonds (which had been joint 4th and joint 2nd) and 90 Day Notice Account (was 2nd) from sale

Zopa improved their fixed rate savings pricing:
1 Year - 1.36% (4th)
2 Year - 1.56% (7th)
3 Year - 1.60% (joint 10th)
4 Year - 1.60% (joint 6th)


Wednesday 6th October

United Trust Bank cut 16 rates across their personal fixed rate deposits, fixed ISAs and business fixed rates by 0.10% – 0.15%.  The main changes impacting best buy tables were:

  • 3 Year ISA – down to 1.10% (falling from 2nd to joint 6th)
  • 5 Year ISA – down to 1.20% (down from 3rd to joint 9th)
  • 1 Year Business – down to 1% (falls from best buy to joint 2nd)
  • 2 Year Business – down to 1.15% (drops from 2nd to 3rd)

Tandem Bank published their results for the 2020 financial year showing that deposits increased to just under £495m, from £363.7m in 2019, with a loss of over £20m for the financial year and the expectation that the Bank will continue to be loss making in the short term.

NatWest announced it had purchased fintech Rooster Money, an app based pre-paid card which allows parents to pay pocket money through, teaches children about savings and provides financial education.  The app has 130,000 users and Rooster will be rolled out NatWest customers.

Monument Bank's mobilisation period officially finished today, but with no announcement from the Bank or updating of the FCA register.  Banks are expected to move quickly through this process and it should not take more than 12 months.  Castle Trust Bank were the quickest through mobilisation – taking just three months – but most banks take six to nine months.  I am only aware of one bank which the regulator has permitted to go beyond 12 months and this was only a short extension.  Typically, we have seen banks who go beyond the 12 months, like Civilised, Vive and revver, ultimately return their licence to the regulator.  It is a concern that Monument hasn’t exited mobilisation, particularly as Recognise, who were authorised after Monument, have recently exited successfully.  Monument have attracted significant funding, and have recruited their key people, so this suggests their issue is a technology one.  However, they have been active in lending markets and at banking events and this does suggest that they expect to resolve whatever issues are delaying with them.  My expectation is that the regulator has seen enough to suggest that they close off the remaining requirements to exit mobilisation to grant them a short extension and that we will see them exit mobilisation in the next 4 – 6 weeks.


Thursday 7th October

The big news of the day was Hampshire Trust Bank  (HTB) agreeing to acquire 100% of Wesleyan Bank Limited from Wesleyan Assurance Society.  Wesleyan Bank had £330m of deposits in its last published accounts but it is likely to have grown since, given it was occupying best buy positions in the market during the summer.  HTB is likely to hold just under £2bn of savings, once Wesleyan is incorporated.  It's a surprise that we haven't seen consolidation amongst the smaller banks sooner and, while it's one less option for savers, it's likely the combined bank will have more to offer savers than the two separate entities.

Leeds Building Society improved their easy access account rates to 0.60% and easy access ISA to the same rate - moving up to joint 4th on ordinary easy access and joint top on easy access ISAs.  They also increased their fixed rate ISA pricing: 
2 Year - 0.95% (joint 10th)
3 Year - 1.15% (joint 2nd)
4 Year - 1.60% (3rd)


Friday 8th October

While Friday is typically moving day in the savings market, there were no changes to rates at all as all the big providers sat on their hands after a quiet week in the market.



The savings market was unusually quiet with very few rate changes during the week and reflects that the calm has been restored, after an over busy summer of activity.  I expect activity to pick up next week but rates are likely to remain stable.  I don't expect to see many rates improve, from current positions, but the likelihood is that rates will nudge up this month rather than fall back.

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