Nationwide will gift Bank of England interest rate cut to mortgage customers but won’t slash savings rates
The move should put pressure on other lenders to keep interest rates on savings at their current level after years of difficulties
NATIONWIDE will protect savers from the Bank of England’s interest rate cut - putting pressure on rivals to do the same.
The world’s biggest building society said it would gift the 0.25 per cent rate fall "in full" to customers on its base, standard and tracker mortgage deals.
But it will keep its Flexclusive Regular Saver account at 5 per cent, its FlexOne Regular Saver at 3.5 per cent and the Help to Buy ISA at 2 per cent.
The Bank of England announced last week is was cutting its rate from 0.5 per cent - held at that level since March 2009 - to 0.25 per cent.
This was a boon for mortgage holders, but a blow to savers, already suffering from years of low rates.
Earlier this week, it emerged some banks such First Direct and M&S, both owned by HSBC, had already slashed their savings rates after last week’s cut.
But Nationwide chief executive Joe Garner said yesterday: "We will protect members who save regularly and who are building up a deposit to buy their first home."
He added: "As the world’s largest building society, we are in the fortunate position to be able to take a long term view and focus on providing great service, security and stability for our members...
"Looking forward, we remain focused entirely on the needs of our members, particularly during times of uncertainty."
It said, however, the ongoing low rate is hitting margins, affecting profits.
The group reported a 5.9 per cent drop in underlying profits to £368million for the three months to the end of July.
It now lends to one in every six homeowners in Britain.
Rachel Springall of financial researchers Moneyfacts said earlier this week of some of Nationwide’s rivals: "The banks are taking full advantage of the fall in bank base rate to impose brutal cut rates on savers who will be feeling exploited."