If you are looking for savings advice in Cheshire, it may be because you are wondering if traditional banks are still worth your time. New figures have revealed how savers across the country have been switching their allegiances from high street banks to other alternatives such as online banks.
Research by KPMG found that high street banks have lost approximately £100 billion in savings, with customers lured by more attractive savings rates elsewhere. The share of saver deposits held by established banking groups dropped from 84% in 2019 to 80% in 2024. Collectively, pre-tax profits were down £3.7 billion last year, while the return on equity is predicted to fall from 13% to 8% by 2027.
This is not to say the banks are not still making a lot of money. The ‘Big Four’ Lloyds, Natwest, Barclays and HSBC are predicted to make just shy of £50 billion in 2025 – but they now stand accused of not adapting to change, from extra costs, the challenges of AI (artificial intelligence) and increased competition.
Moreover, customers have complained of greedy banks profiteering from higher interest rates, while offering less-than-attractive returns for account holders. Regulators have grilled the ‘Big Four’ to find out why savings account deals have not kept up with high mortgage and loan rates.
The British Government is now being urged to follow some other European countries like Spain and the Czech Republic in imposing a windfall tax. It has been estimated that the Treasury could raise £11.3 billion from the four major banks alone, without compromising the banking sector’s global competitiveness.
