Nationwide, Britain's largest building society, has cut savings rates by up to 0.25%, affecting thousands of savers. The reduction comes unexpectedly as the Bank of England base rate has remained unchanged this year, with no immediate signs of a shift.
The building society attributed the move to an 'exceptional inflow of savings' following stock market volatility. Chief executive Philip Williamson explained that a fall of 18.5% in the FTSE 100 in the first half of the year led to a surge in deposits into non-equity accounts. He noted that most competitors had already cut rates, drawing more savers to Nationwide.
Some accounts, including CashBuilder, CapitalBuilder, and Bonus 60, were spared. However, rates on larger balances in InvestDirect, Tessa, and Isa accounts were reduced. The cash mini Isa rate dropped to a tax-free 4% from 4.25%, while the e-Saver internet account fell by 0.25% to 4% (3.2% after tax).
InvestDirect customers with more than £10,000 now earn 3.4% (2.72% after 20% tax), still among the best buys. Other providers also cut rates: Northern Rock reduced its Tracker Online account by 0.15% to 4.35% (3.48%), and Intelligent Finance cut its savings account by 0.21% to 3.8% (3.04%).
