DP18/6: Price discrimination in the cash savings market

On 25 July 2018, we published a Discussion Paper on price discrimination in the cash savings market. We are concerned that competition is not working well in the cash savings market, particularly for longstanding customers. We are, therefore, opening a discussion on options to address the harm, including the introduction of a basic savings rate (BSR).

Show DP18/6 (PDF)

Infographic: Price discrimination in the cash savings market - summary

Why we are issuing this Discussion Paper

In 2015, we completed a competition study into the cash savings market. This found that competition was not working well, particularly for consumers who stay with the same provider for a long time, who generally receive lower interest rates.

It also found that: consumers are put off switching by the expected hassle; large, well-established personal current account providers are able to attract most savings balances despite offering lower rates; and there is a lack of product transparency.

We implemented a package of measures to address some of this harm, which came into force in 2016. This included trialling other disclosure remedies proposed in the Market Study, including a switching box, but they did not stimulate sufficient changes in consumer behaviour to address the harm to longstanding customers.  

We are now seeking feedback on alternative options to address the harm to longstanding customers caused by price discrimination. The Discussion Paper sets out a range of options including the introduction of a basic savings rate (BSR). This would apply to all easy access cash saving accounts and easy access cash ISAs, respectively, after they have been open for a set period of time, such as a year.

Who this applies to

We invite views from all parties with an interest in cash savings. This includes:

  • banks and building societies
  • consumer groups and individual consumers
  • industry groups / trade bodies
  • industry experts and commentators
​​What you need to do

Please send us your comments by 25 October 2018.

You can send them to us using the online response form.

You can also:

  • email your responses - [email protected]
  • write to us - Laura Saks, Strategy & Competition Division, Financial Conduct Authority, 12 Endeavour Square, Stratford, London, E20 1JN.

We will be holding a firm event on 24 September 2018 and a roundtable discussion for consumer organisations on 1 October 2018. We will issue invites in due course. For more information about either event, please email [email protected]​​​​​.