Nationwide pledges to ‘protect’ savers after rate cut

Nationwide also said it would pass on the full base rate cut to mortgage customers. Picture: Greg Macvean
Nationwide also said it would pass on the full base rate cut to mortgage customers. Picture: Greg Macvean
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Nationwide has moved to protect savers from ultra-low interest rates, saying it will maintain rates on savings accounts for regular customers.

New chief executive Joe Garner, who took on the top job in April, said: “We will protect members who save regularly and who are building up a deposit to buy their first home – as a result, the Flexclusive Regular Saver at 5 per cent, the FlexOne Regular Saver at 3.5 per cent and the Help to Buy Isa at 2 per cent are being maintained at their current rates.”

Garner added that Nationwide will pass on the Bank of England’s base rate cut – from 0.5 per cent to a new record low of 0.25 per cent – “in full” to mortgage customers with its base rate, standard rate and tracker home loans.

READ MORE: BoE cuts interest rates as recession fears intensify

The move comes despite pressure the building society is under from the cut in rates.

Nationwide saw underlying pre-tax profits fall 6 per cent to £368 million in the three months to the end of June, largely due to increased costs and a reduction in net interest income.

The group said: “The sustained low interest rate environment and competition in core markets will maintain pressure on margins and we anticipate profits are likely to moderate in the period ahead.”

Nevertheless, residential mortgage lending hit £8.6 billion in the period, an increase of 26 per cent on the same quarter last year. The number of current accounts opened in the quarter rose 21 per cent to more than 139,000.

READ MORE: Nationwide ‘committed’ to branches as lending grows

On the impact of Brexit, the lender said: “Whilst it is too early to make clear impact assessments about the EU referendum outcome, the uncertainty generated could adversely impact investment decisions and consumer spending with a consequent impact on broader growth in the near term.

“The longer term impact will depend on a range of factors, not least the time it takes to reach an agreement with EU and non-EU economies, the nature of those agreements and the broader political situation.”

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