Thousands of Yorkshire Building Society customers will see their returns diminished as one of Britain’s best savings deals gets the chop.
At present, savers with issue one of its Regular Saver bag a return of 3.55 per cent on balances up to £20,000.
However, Britain’s third biggest mutual has written to these loyal savers to say that they will be transferred to Single Access Saver Unique Edition paying 1.5 per cent in December 2017.
And in a double-whammy, savers will only get this rate for one year as it then coverts to its Triple Access Saver, which currently pays just 0.6 per cent.
Big drop: Savers with the Yorkshire BS Regular Saver could see their returns drop from £710 a year to just £120
It will mean the 66,000 savers who currently have this deal will see their returns crumble by 83 per cent in 12 months.
One reader, Peter Hurst from Leicestershire contacted This is Money and is outraged by the decision.
He says that on a balance of £20,000, the old interest payment means a return of £710 a year.
HOW THIS IS MONEY CAN HELP
From December – when the changes take place – this will drop to £300 and the following year to £120.
He said: ‘This is an example of mutuality at its worst.
‘If savers cannot trust a building society to honour the terms of an account, even if the society regrets offering those terms, is there any financial institution left that can be trusted?
‘Yorkshire BS will never see a penny of my money again after behaving like the worst of our banks.’
The mutual told This is Money that it regularly review its savings accounts to ensure they are competitive and sustainable in the market place, while trying to ensure it offers a savings product range that offers good value and is simple to understand.
The 1.5 per cent rate to be offered to these Yorkshire BS savers from December 2017 can be beaten by a number of fixed best buy deals in our savings tables:
Kent Reliance, 1.85%
Milestone Savings, 1.82%
Atom Bank, 2.05%
Paragon Bank, 2.05%
The current Regular Saver account is made up of two parts, Yorkshire says, variable interest and bonus.
The variable rate has historically moved up and down when base rate changes have occurred.
When the account was initially put on sale, Bank of England base rate was 4.75 per cent, rising to 5.75 per cent over the next year then falling over time to the current 0.25 per cent.
The account, including bonus currently pays 3.55 per cent.
Customers will have built their balance up over time and balances must not exceed £20,000 for the bonus to be paid.
Customers did not need to start from zero each year but have to make a withdrawal to keep the balance below £20,000 to earn the bonus.
Savers could put just £10 a month into the account to ensure they received the rate, making it one of Britain’s most generous surviving savings accounts.
In contrast, the best buy easy-access savings rate in the independent This is Money savings tables pays just 1.3 per cent.
A spokesperson for Yorkshire BS, said: ‘As a mutual, we are committed to offering our members good, long-term value through a range of competitive savings accounts.
‘Following a review of our savings accounts we have taken the difficult decision to transfer our Regular Saver accounts, to a new Single Access Saver account.
‘All customers affected by the account transfer will be notified in writing and will be given two months’ notice.
‘Customers will benefit from any account bonus they are due and we are lifting account restrictions during the notice period to allow penalty free access to funds should customers wish to close their account early as a result of these changes.’
Mr Hurst, who sent over the letter about the changes along with the original document for the account from when he opened it in 2006, says the rate is far worse than its current two-year Regular Saver that pays 1.75 per cent – although this only allows a maximum balance of £6,000 .
He added: ‘The building society is pulling the plug on its most loyal savers.
‘Most savers will be better pulling their money out of the Yorkshire and looking for a better rate somewhere else in a fixed-term bond.’
Leeds Building Society pulled a similar deal in January 2015 which saw its regular saver rate chopped from 3.05 per cent to 0.85 per cent.
Earlier in the year, Yorkshire BS scrapped its Norwich and Peterborough brand, shut down 100,000 current accounts and announced plans to cull 48 branches before the end of 2017.
THIS IS MONEY’S FIVE OF THE BEST SAVINGS DEALS
RCI Bank pays 1.3% AER variable interest – the best rate available – on its easy access deal. Deposits in its Freedom Savings Account have no FSCS protection, but you are covered for up to €100,000 by the French equivalent (FGDR).
Milestone Savings pays 1.82% AER on its one-year fixed term deposit account. The account is Sharia compliant and offers an expected profit rate rather than guaranteed interest. Minimum deposit is £10,000.
The Post Office pays 1.01% AER variable interest on its easy-access, Online Isa. The account allows transfers from an existing provider, plus you can split tax-free savings between both instant access and fixed-rate products. Rate drops to 0.25% after 12 months
Masthaven pays 1.7% AER fixed interest if you lock your cash away for 18 months. Alternatively savers can set their own fixed-rate term themselves. It requires a minimum £500 deposit and you can choose to receive interest monthly or annually
Yorkshire Bank pays a best-buy rate of 1.5% AER fixed until 31 Januray 2019 on its Cash Isa Fixed Rate Bond. The account allows transfers in and requires a minimum £2,000 deposit.