Cash savings market study

Published: 20/01/2015     Last Modified: 20/01/2015

In January 2015, we published the final findings of our cash savings market study and our proposed remedies. The final findings set out our conclusions on the effectiveness of competition in the cash savings market. Our proposed remedies, on which we are seeking comments, set out how we intend to intervene in the market to make competition work better for consumers.

MS14/2.3: Cash savings market study report: Part I: Final findings, Part II: Proposed remedies [PDF]

Scope and our approach

We focused on interest-bearing cash savings accounts. We covered seven main types of savings accounts – easy access accounts, fixed term bonds, cash Individual Savings Accounts (ISAs) with no term, fixed term cash ISAs, notice accounts, children’s accounts and regular savings accounts.

We gathered evidence by collecting and analysing data from firms, requesting views from stakeholders, commissioning a consumer survey, conducting a randomised controlled trial and commissioning a report on international comparisons.

Our final findings

The cash savings market is not working well for many consumers:

  • Providers have significant amounts of consumers’ savings balances in accounts opened more than five years ago, yet these accounts pay lower interest rates than those opened more recently.
  • Providers need to improve the transparency of their practices as little information is currently being given to consumers about alternative products.
  • Consumers are put off switching by the expected hassle and perceived low gains from opening another account. 80% of easy access accounts have not been switched in the last three years.
  • The large personal current account providers have considerable advantages because they can attract most easy access balances despite offering lower interest rates.

Our proposed remedies

We are proposing remedies in four main areas:

  • Giving consumers sufficiently clear and targeted information at the right time so that they can easily and quickly compare their savings accounts with alternative ones and know how to switch if they want to do so.
  • Making the switching process as easy as possible so that it does not put consumers off moving their money to another savings provider or to another savings account with the same provider.
  • Removing some of the advantages of the large providers by making it easier for firms to provide a way for consumers to view and manage accounts with different providers in one place.
  • Being more transparent about the way in which providers are reducing interest rates on variable rate savings accounts the longer a consumer holds the account.

Next steps

We are seeking comments on our proposed remedies. All comments should be sent by noon on Wednesday 18 February 2015 to cashsavings@fca.org.uk. We will continue to engage with savings providers, consumer organisations and other stakeholders during the next phase of work to finalise and implement our remedies. 

We'll publish a statement on our decision on remedies and consult on any rule changes.

Find out more

For more information see:

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