Nationwide is poised to introduce an unwelcome change that will see interest rates slashed on numerous savings accounts from next month. The building society has announced that the shake-up will begin on Tuesday, February 10, meaning many savers will earn less on their deposits.
Following the cut, Nationwide revealed it will be lowering rates across a wide range of products, with decreases spanning between 0.15% and 0.25%. In total, an eye-watering 37 separate Nationwide savings accounts and products will be hit by this adjustment.
The reductions will impact regular savings accounts, children’s savings, limited access accounts, and instant access products.
Regular savers will see declining rates on products such as the Help to Buy ISA and Continue to Save accounts. Parents will also feel the squeeze, with several children’s products including Child Trust Funds, Junior ISAs, and Future Saver accounts being impacted.
Limited access savers are amongst those most severely affected, with rate cuts applied to Triple Access, Single Access, and Limited Access savings and ISAs.
Instant access customers won’t escape either, with numerous Flex Instant Saver issues and Reward Saver accounts facing reduced rates. Some Flex Saver and Flex ISA products will also deliver less interest across different balance tiers.
Nationwide has stressed that the majority of rate reductions are less than the full Bank of England cut. The building society has also confirmed that certain products will remain unchanged by these adjustments, including the Flex Regular Saver, FlexOne Saver and Start to Save accounts.
On a positive note, Nationwide has revealed an increase in the rate on its five-year Fixed Rate Bond and ISA to 4% for customers willing to lock in their funds for a longer period.
Savers are being urged to check their account details to establish whether they hold any of the 36 products affected by the recent cuts.
In December, rates dropped to their lowest in almost three years as the Bank of England warned that further cuts will be a “closer call”. The Bank’s Monetary Policy Committee (MPC) voted to slash rates from 4% to 3.75%.
Governor Andrew Bailey stated that the UK has “passed the recent peak in inflation and it has continued to fall”, enabling the MPC to reduce borrowing costs for the fourth time this year. “We still think rates are on a gradual path downward,” he said.
“But with every cut we make, how much further we go becomes a closer call.”
Economists have reportedly suggested that the pace of interest rate cuts will slow next year as the Bank approaches what it considers a “neutral” rate and inflation nears its 2% target level.