UK Banks Accused of Setting Too Low Savings Rates – Time to Look at Bitcoin?

Overview of the Situation

• The UK Financial Conduct Authority (FCA) has publicly criticized the big four banks – HSBC, Natwest, Barclays and Lloyds – for their pitifully low easy-access savings rates.
• These rates are between 0.7% to 1.35%, while the Bank of England base rate is 5%.
• With UK inflation staying at 8.7%, consumers are facing an uphill battle, which is only made worse by banks not providing them with proper returns on their savings.

FCA’s Intervention

The FCA has invited the top brass of these banks to a meeting this Thursday in order to discuss ways in which they can provide better value for customers. Reuters quoted a person familiar with the FCA’s position who said: „We do think there is more value that can be provided to consumers, we are not happy with some of the lower savings rates we see, and we want banks to be supporting customers . . . and people to be able to make informed choices.“

Negative Effects on Consumers

With food inflation around 30% and an average 5-year fixed mortgage rate above 6%, UK consumers are starting to suffer from a lack of options when it comes to deploying their cash wisely. The official inflation rate does not take into account how items included in inflation have been manipulated over the years making it even more difficult for savers who receive only around 1% return on their savings while losing around 10% per year due to inflation.

Alternative Investments

As an alternative option for savers, Bitcoin has risen more than 100% since the beginning of 2021; however, this asset class carries its own risks as it is still very volatile and tiny compared with other assets classes like fiat currencies.

Conclusion

In conclusion, it is unfair for banks – judged as too big too fail – to just look out for themselves while neglecting their customers needs during such difficult times economically speaking. There is no guarantee that investing in Bitcoin will result in any gains; however it might still be a better option than putting money into banks that offer such paltry returns on savings accounts due to high levels of inflation in comparison