Why are we reducing the rates on Promise Saver and ISA again?
Principality has paid above the average market rate for a long period of time against a backdrop of falling rates in the market. We have done this to ensure that we reward our Members’ loyalty by providing a competitive savings rate on our Promise Saver and Promise ISA products. However, competitors have continued to drop their rates further and as a result we have seen the volume of customers in our Promise accounts grow due to its competitive position. We cannot sustain this position. We fund the majority of our mortgage lending through our savers so if we continue to pay significantly above market rates on savings we’ll no longer be able to lend at competitive rates which is essential to support our business model and growth strategy.