Banking code changes to benefit savers

Changes to the banking code mean that banks and building societies will have to notify savings customers of falling interest rates, and will also enable consumers to switch current accounts more easily.

With the Bank of England interest rate at a 40-year low, mortgage borrowers are enjoying low repayment rates. But there is concern among savers facing falling returns.

Savings accounts providers have agreed to notify customers when, in any 12-month period, interest rates on their accounts fall by 0.5% or more relative to bank base rates.

Customers will then have the option to withdraw their money without notice and without penalty.

Other changes include a package of new service standards for customers moving current accounts between providers. These are backed by a commitment to waive any charges caused by errors or undue delay by the bank or building society concerned.

The Consumers&#39 Association has welcomed the new moves, which mean providers will be required to swap information such as direct debits within three days, rather than the present five.

But it calls upon the industry to agree a standard for comparing interest rates across the credit card market. At present credit card comparisons are hard thanks to more than six different ways of calculating interest.