Building societies have been blowing High Street banks out of the water in the UK by offering attractive interest rates on mortgages and savings accounts, new research has said.
Building societies as diverse as the Hanley Economic, Leeds, Skipton, and Yorkshire have been battling it out for consumer market share, engaging in a price war that only makes the deals offered by personal and business bank account providers look weak in comparison.
One family of savers who prefer building societies to banks, Mr and Mrs Hemal and Deepa Bakrania, do all their banking through Nationwide. The couple, along with their 13 year old daughter Amy, have an e-Savings Plus savings account with the building society that pays a pre-tax interest rate of 2 per cent, while they also used Nationwide when it came down to taking at a 2.79 per cent tracker mortgage on their Northampton home.
Both Mr and Mrs Bakrania, who work as a postman and a community support worker respectively, have been saving to send their daughter off to university in just five short years. With tuition fees steadily rising, Amy’s parents need to save as much as they can for her education, as the young girl currently wishes to become a dentist.
Many High Street banks, especially those who accepted taxpayer bailout money at the height of the banking crisis, are finding it increasingly harder to compete. Many have even begun offering rates that would result in customers actually losing thousands of pounds over competing products.