The regulator said firms will need to closely monitor the effectiveness of customer communications, with larger firms providing the FCA with an evaluation by the end of 2023 and any follow up action they are taking.
They will need to support consumer financial resilience by encouraging customers to start saving and/or search for higher rates, with the largest firms committing to support a targeted firm-by-firm communications campaign and consider how they can support their customers to access the free advice available from MoneyHelper.
The largest savings providers have also voluntarily committed to increase the efficiency of cash Isa to cash Isa switching, explore the potential of open banking and work with the FCA to develop a savings dashboard which gauges consumer activity in the savings market.
The FCA is continuing to monitor the market and will take further action if it doesn’t see significant progress by the end of 2023.
Harriett Baldwin MP, chair of the Treasury committee, said: “The committee has been pushing for progress on rates for savers all year and this action by the FCA represents more progress. Consumers should shop around for the best rates but loyal savers should not be penalised.
“If the £250bn in savings earning little interest can be made to work harder, it will help with the cost of living and help to tackle inflation.”
Last week, a Treasury committee heard Nikhil Rathi, chief executive officer of the FCA described the pace at which high street banks have acted on passing on increasing interest rates as "slow".
Rathi said the FCA has been raising this issue publicly since May last year but argued that the movement has been slow.
Earlier that week, Barclays, HSBC, Lloyds Banking Group, NatWest Group and the FCA outlined to MPs what work they were doing to improve savings rates for consumers.
Meanwhile, earlier this month, the Treasury committee asked the chief executives of the UK’s largest banks if all their savings products provide ‘fair value’ to customers, whether customer inertia is being exploited and what steps they’re taking to notify their customers of higher rates available.
sonia.rach@ft.com
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