Fury as banks rake in £23billion from soaring loan and mortgage charges while failing to pass on interest rate hikes to struggling savers
- NatWest and Lloyds last year grabbed billions from loan and mortgage charges
- But rates offered to savers have been kept low at typically less than one per cent
- Gulf between the lending and savings rates has boosted profits as gap widens
Banks are creaming off billions by increasing lending fees to hard-pressed households while not passing on rising interest rates to savers.
The Mail on Sunday can reveal that in 2022 NatWest and Lloyds grabbed more than £20 billion from soaring loan and mortgage charges.
At the same time, rates they offer to savers have been kept at derisory levels, often less than one per cent.
The Bank of England has sharply increased interest rates, from 0.1 per cent in December 2021 to four per cent currently, and the typical cost of a ten-year fixed-rate mortgage is now 5.34 per cent – almost double the 2.85 per cent of a year ago, according to financial website Moneyfacts.
In 2022, NatWest and Lloyds grabbed more than £20 billion from loan and mortgage charges
But despite lending fees going up, the rates these banks offer to savers have been kept at derisory levels, often less than one per cent
Customers are ‘frustrated’ as interest rates are hiked for mortgages and loans, but not savings
But the average high street bank’s easy access savings account is still paying less than one per cent.
The gulf between lending and savings rates, known as the ‘net interest margin’, increasingly boosts profits as the gap widens.
Lloyds, Britain’s biggest bank, and NatWest, which is 46 per cent owned by the taxpayer after it was bailed out in 2009, have earned £23 billion between them in this way in 2022, according to new analysis by City firms seen by The Mail on Sunday – £4 billion higher than the year before.
Campaigners say Britain’s biggest lenders have ‘brazenly’ ignored complaints about the rip-off, as the banks prepare to report bumper profits later this month.
Jenny Ross, money editor at the Which? consumer group, said: ‘The cost-of-living crisis is pushing many households to the brink, so it’s no wonder that people feel frustrated when they see banks hiking interest rates for borrowers with mortgages, while the equivalent rise is denied to many savers.’
James Daley of consumer campaign group Fairer Finance said: ‘Savers will understandably be furious.’
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