Marcus, Kent Reliance and Paragon all cut easy access rates and Ford Money pulls re entry
Marcus by Goldman Sachs have announced a cut of 0.10% to their best buy easy access account this morning. Hot on heals of its 2020 Q1 results announcement, which showed it has grown to over 500,000 savers in the UK with balances totalling more than £17bn, the bank cut its rate to new customers to 1.20%. Existing customers received notification that the rate on their accounts will reduce to 1.20% from 7th May.
Kent Reliance cut its own easy access rate from 1.20% to 1% this morning too, ahead of the change from Marcus, and Paragon have cut their 1.21% rate to 1% for new customers. These moves all follow Virgin Money's pull back from its best buy of 1.31% to 1.01% last week, in what has been a bonfire of rate cuts for easy access savers.
Ford Money were due to relaunch their flexible saver this morning, but this was pulled however not before coverage of the move appeared alongside the Marcus cut. Its reentry to market will have been welcomed by savers, but the move is understandable in light of competitor pricing movements.
All eyes are on Aldermore Bank now, who sit top of the easy access tables with their 1.25% rate. Although Aldermore, which launched in 2009, now looks after over £10bn of savers deposits, we don't anticipate that it will hold this position for long and expect it to pull back by the end of next week. Savers likely have a short window of opportunity to secure this rate as we expect any new issue to be priced around 1.15 - 1.20%.
With Marcus, Saga, RCI and Investec all priced at 1.20%, and Shawbrook tucked in behind at 1.15%, there's some support at this price level. If Aldermore do drop in to that range and Ford Money re-enter the market, this will further bolster this. However, there's precious little between this and a clutch of providers priced around 1%. Any further downwards movements from this group is likely to trigger further falls towards 1%.
What will be interesting to see is if these price falls trigger a renewed interest in cash ISAs, which have waned in popularity with the advent of the personal savings allowance and pricing typically being lower than their ordinary counterparts. However, with Shawbrook Bank, Bath and Penrith Building Societies all paying 1.25%, easy access cash ISAs now look a much better bet for savers.