The 2026 Savings Check: Are Banks Still Failing to Pass on Value as Interest Rates Fall?
Andrew Bailey endorsed the Financial Conduct Authority's scrutiny on savings rates, maintaining that a failure to offer competitive returns raises significant 'questions about fairness to customers'.
Since the base rate peaked at 5.25% in 2024, the Bank of England has implemented a series of cuts, bringing the rate down to 3.75% as of February 2026.
Despite this downward trend, NimbleFins' Best Savings Accounts Guide shows that top easy-access accounts from providers like Monument, Atom Bank, and Chase are still offering competitive rates up to 4.75%.
The FCA set out a 14-point action plan on cash savings after a review found nine of the biggest savings providers only passed on 28% of the base rate on their easy access accounts.
Under the Financial Conduct Authority's Consumer Duty rules, firms offering the lowest savings rates were required to justify by the end of August 2023 how their products provided fair value. Since that deadline, the FCA has actively monitored the market, engaging directly with firms that failed to meet these standards and ensuring that savings products are aligned with the 'price and value' outcome of the Duty.
Mr Bailey told a Q&A with i newspaper readers: "The Financial Conduct Authority announced it's taking action to ensure that customers get a fair deal and we support their work.
"There needs to be effective competition for deposits, which will be encouraged by the FCA's measures to improve transparency."
While the FCA previously noted that major providers were only passing on about 51% of base rate increases to easy-access savers, the narrative has shifted for 2026. With UK inflation falling to 3.0% in early 2026, savers are finally seeing 'real' returns on their money. Our latest guide shows the top one-year fixed rate is currently 4.35% (offered by OakNorth via Meteor Savings), meaning proactive savers are now significantly beating inflation for the first time in years.
Mr Bailey said there were signs banks were beginning to pass on rate rises more quickly.
He said: "The latest numbers we have in June suggest that the pass-through of our June interest rate rise of 50 basis points has been pretty full actually.
"So that's a change because it certainly was not full as has been well covered. That was not the case previously."
The UK's economic outlook has improved significantly, with CPI inflation hitting 3.0% in early 2026—a sharp decline from the double-digit peaks of 2023. This cooling has been aided by stabilizing energy costs; the OFGEM energy price cap for the first quarter of 2026 is set at £1,758 for a typical household. Furthermore, both food and energy inflation fell to 1.6% in early 2026. The Bank of England now projects that inflation will reach its 2.0% target by the second quarter of 2026, marking a return to its long-term stability goal.
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