Moneyfacts research reveals 351 savings accounts have been withdrawn from the market since the start of the year, 191 of which were withdrawn in November 2012 alone. The research also revealed the number of savings accounts paying above BoE base rate fell by 304 accounts from January 2012, and 162 of these have been withdrawn since the start of November.
Sylvia Waycot, finance expert at Moneyfacts.co.uk, said:
“This year, the November cold snap doesn’t just refer to the weather. The savings market is in meltdown.
“Moneyfacts research shows the devastating effect that the Funding for Lending Scheme is having on savings and there seems to be no sign of any let up in the misery that is sure to be inflicted on the nation’s savers.
“Providers are no longer just cutting savings rates as they were a month ago, they are now pulling entire products as they find that constantly reducing rates is not enough to remove them from Best Buy tables.
“As savers scramble for the best accounts, providers are in danger of being flooded with applications, which can cause disappointment when a product is over subscribed to or irritation at service levels. Withdrawing products removes this risk of reputational damage.
“Of those products left, many offer reduced rates that barely match the BoE base rate. The situation is made worse because savers have the added burden of inflation eating into any meagre returns.
“Sadly, I see no sudden end to this savings nightmare. Funding for Lending has an 18 month window where providers can borrow Government money at vastly discounted rates and four years thereafter to lend the money out. For all of that time, the needs of the poor saver are going to be on the back burner.
www.moneyfacts.co.uk - The Money Search Engine
Moneyfacts.co.uk is the UK's leading independent provider of personal finance information. For the last 20 years, Moneyfacts' information has been the key driver behind many personal finance decisions, from the Treasury to the high street.
© 2005-2013 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.