Martin Lewis says Jeremy Hunt has 'hinted' to him savings rate could change

Emily Cleary
Updated ·3 min read
The Chancellor of the Exchequer Jeremy Hunt speaking during the British Chambers Commerce Annual Global conference, at the QEII Centre, London. Picture date: Wednesday May 17, 2023. (Photo by Jordan Pettitt/PA Images via Getty Images)
Jeremy Hunt has 'hinted' that he could impose a rise in savings rates on banks. (Getty Images)

Interest rates on savings accounts could increase as the UK battles its worsening mortgage crisis, Martin Lewis has said.

The consumer rights campaigner said on Monday that Jeremy Hunt had "hinted" at the move in discussions with him.

He said the Chancellor, with whom he met last week, still had the idea "on the agenda" as a way to reduce inflation and ease the current cost of living crisis.

"What should be discussed - and the chancellor hinted to me it's still very much on the agenda because when I met him I pushed quite strongly for this - is that we need to look at savings rates," he said.

"The banks have not been putting up savings rates commensurately with the borrowing rates they have put up."

Lewis told BBC Radio 4's Today programme that doing so would be a "less painful" way of helping to ease the mortgage crisis.

NEWPORT, UNITED KINGDOM - JUNE 12: Estate agent for sale and to let signs are seen outside residential houses, on June 12, 2022 in Newport, England. According to a report from the Royal Institution of Chartered Surveyors (RICS) soaring interest rates and falling prices will mark the end of the UK’s 13-year housing market boom potentially leading to a house price crash. (Photo by Matt Cardy/Getty Images)
Rising interest rates have created a UK mortgage crisis in recent months. (Getty Images)

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He said he welcomed the news that homeowners could now ask for a six-month interest-only period, or a six-month extension on their mortgage, but said an increase in savings rates should be the government's next move.

He said: "When you are trying to bring down inflation you're trying to squeeze borrowers. But also, to take money out of the economy, a much more palatable and less painful way to do that is increasing savings rates so that people are encouraged to save more."

Lewis accused banks of treating taxpayers unfairly, and said they had a duty to stop increasing their profit margins.

"The fact that the banks - who we bailed out in 2007 when they were in trouble - are now profiteering by increasing their margins when we the state, the taxpayer, is in trouble, seems a little beyond the pale for me," he said.

Downing Street has urged supermarkets to pass savings on to shoppers, and for banks to ensure savers benefit from higher interest rates.

Hunt will meet regulators on Wednesday to discuss “what actions the regulators are taking, what more we could do working together, are there any potential barriers to them going further”, the Prime Minister’s official spokesman told reporters on Monday.

London, UK. 21st June, 2023. Money-saving expert, Martin Lewis, in Downing Street to visit Number 11. Credit: Joe Maida/Alamy Live News
Consumer rights campaigner Martin Lewis is lobbying the Treasury to ease the pressure on mortgage holders by increasing interest rates on savings. (Alamy Live News)

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The official said: “We absolutely expect banks to pass through higher rates to savers, as they are for mortgage holders, and we’re working closely with the FCA (Financial Conduct Authority) who we know are monitoring it closely.

“It’s not only the right thing to do but it also has the potential to reduce inflation because people are encouraged to save rather than spend.”

Watch: Hunt: Tackling inflation my number 1 priority