Loyal savers do not get rewarded for their custom as they suffer lower interest rates, says Regulator

Loyal bank savers are being shafted out of sizeable sums of interest returns because they are reluctant to shop around, according to the city watchdog. Large banks have come under fresh criticism for their covert tactics, as the FCA slams them in their latest research.
Evidence procured by the FCA identified a pattern of banks and building societies paying lower interest rates on older accounts, as many savers do not look elsewhere. This can be chalked up to an emerging inertia within them, derived from feeling too comfortable for too long. 
Many people also hold both a savings & current account with the same bank, no doubt for convenience of access to onesí savings. However, the largest current account providers are infamous for paying average lower rates.
Policymakers and government think tanks are maintaining their commitment to reducing the stranglehold Britainísí ëbig fourí lenders have imposed on the banking industry. Controlling roughly 80% of the market, the aforementioned banks have done little to inspire saver confidence in recent years, with the misappropriation of payment-protection insurance (PPI) the latest in a sequences of scandals. 
ëCompetition not workingí
The Bank of England fanned the flames further on an already heated issue, with recently compiled figures showing that smaller competitors, such as Virgin and Metro Bank, accounted for under 5% of total deposits in the UK. 
ìWhile some aspects of the cash savings market are working well, competition does not appear to be working in the interest of many consumers,î said Christopher Woolard, director of policy, risk and research at the FCA in London.
ìIn this market there is a minority of very active, very engaged consumers who regularly change provider to get the best deal. We want to look more closely at what is inhibiting the majority of consumers from getting better deals.î
Whether it be a matter of customers being set in their ways or the propagation of a culture of ignorance amongst the public, the majority of savers are missing out on higher interest returns. Banks offered an average of 0.8% on easy access savings accounts in 2012 & 2013, yet the rate offered for similar accounts opened in 2009 remains at less than 0.3%, according to FCA data.
The regulator will forge ahead with its investigation into the cash savings industry before making the call on whether it should intervene to enhance competition. The results will of the investigation will be published in a report later this year.
ëCrystal clearí
Banks customers are losing out on a collective £4.3bn each year by hoarding their savings in low-interest, low-value accounts, according to research from consumer group Which?
Which? Executive director, Richard Lloyd, posited: “While the regulator continues to investigate this market we think providers should scrap the savings trap and do more to help people make the most of their money.
ìBanks should be crystal clear about interest rates, let people know when bonus rates come to an end and make it easier for people to switch ISAs.î
Teaser Rates
Offering high returns over a promotional period, the presenting of ìteaser ratesî by banks have led to confusion for many savers. Baffled by the length of time they are entitled to the hiked up bonus rate, savers have cost themselves long-term profits. The use of these bonus rates has dropped in recent years, with fewer than 5% of accounts including them, compared with 9% in October 2011.
However, the FCA say that roughly half of all easy access accounts held by customers have offered bonus rates in years gone by. 
Switching a current account to a new bank or building society became considerably simpler last September with the introduction of the seven day switching guarantee. This was highlighted by figures from the regulatory service, The Payments Council, which showed there were 609,300 switches from October to March, a 14% increase on the year before.

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