Banks could be forced to up their interest rates under new rules from the financial watchdog.
Banks have been slammed over the last year for their slow response in increasing their interest rates for savers alongside the Bank of England rises.
At the same time, banks have not held back in hiking their mortgage rates alongside the rises.
Over the last 18 months, the Bank of England's base interest rate has risen 11 times, taking it to 4.25% in March - this is the highest the base rate has been for 14 years.
The Financial Conduct Authority (FCA) has said it will use tougher consumer protection powers to ensure banks pass on interest rate rises to savers.
The tougher stance will come as the watchdog starts to phase in its new consumer duty rules from July 31 this year.
According to recent research by Coventry Building Society, £256billion worth of savings is earning no interest at all.
This means people could be missing out on extra cash worth hundreds and the FCA is hoping to address this with their new rules.
When interest rates are high, savers are supposed to benefit as interest rates for savings pots should also go up - however as said before this has not been the case.
If you can’t see the poll, click here
According to Moneyfacts, when the base rate began rising from its 0.1% low in December 2021, the average easy-access rate was paying just 0.21%.
The average now is 2.01% - however, during this time the Bank of England's base rate rose by over four percentage points.
The chief executive of the FCA Nikhil Rathi, has recently written to the Treasury Committee criticising the UK's biggest banks for "profiting from interest rate rises" by not passing on rate rises to savers.
He said that loyal savers were being the hardest done by as their pots were not being offered higher rates like new savers.
He explained that it had been “standard practice” for financial firms to offer more attractive rates to new savers while existing savers earned less competitive rates.
He said: “We expect that the harm from this practice - and the loyalty penalty faced by longstanding customers - will have increased as the base rate has risen.”
From July, the FCA chief said that banks needed to offer "fair value to all groups of savers.".
He added: "We have made clear that firms should be able to justify and explain the rationale for the speed and degree to which they make changes to their various savings rates.”
The FCA has also "challenged" firms that have made “relatively small” increases to their variable savings products and where there was a “material time lag” in passing through benefits to savers.
Rathi also said that the financial regulator was open to making interventions if it saw “loyalty penalties” being applied to savers.
