The UK’s financial watchdog had said that while it has seen some positive action by banks to improve their savings rates in preparation for its Consumer Duty, it wants them to speed up progress.

On Thursday the Financial Conduct Authority (FCA) had a meeting with the UK’s largest banks and building society Nationwide to address issues in the savings market.

The regulator said that during the meeting it challenged firms where their decision making on savings rates had been slow.

The move comes after the Treasury Committee recently raised concerns about "measly savings rates" for British consumers.

In May the Committee wrote to 'scale challengers' Nationwide, Santander, TSB, and Virgin Money to ask them what proportion of their interest rate rises are passed onto their savings customers, questioning why easy access savings rates appeared to be much lower than the Bank of England’s (The Bank) base rate.

The Bank's Monetary Policy Committee, which last month said that the pass-through of interest rate rises to savers was “unusually weak”, says that roughly 60 per cent of household deposits are currently held in instant access accounts.

The Committee added that when it first began its inquiry into retail banks in February, the 'big four' banks – Barclays, HSBC, Lloyds Banking Group, NatWest Group – offered between 0.5 and 0.65 per cent for easy access savings accounts. The banks have since upped their rates to between 0.7 and 1.35 per cent.

“Many people are feeling the squeeze from rising interest rates and prices, so it is more critical than ever that they are offered fair and competitive saving rates,” said the FCA following its meeting with UK banks.

It continued: “We want to see a competitive market with fair value retail banking products – and with banks helping consumers to access them. We discussed how our consumer duty will set a new standard for firms from the end of July, including on savings rates. We set out that expectation to bank and building society leaders in today’s meeting.”

UK Finance chief executive David Postings, who attended the meeting, said that it had been "constructive".

“The savings market is competitive, with a wide range of different accounts available to help people with their individual saving needs," he said. "We always encourage customers to shop around for the type of account that best suits them."

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