Millions of savers with Lloyds Bank and its sister brands Halifax and Bank of Scotland are to receive letters telling them they are being moved on to a deal paying a worse or a better rate of interest.
The banking giant is ditching 47 old easy access accounts which are no longer on offer and replacing them with three standard savings accounts each for Lloyds, Halifax and Bank of Scotland.
The group has not said how many people will be affected, citing commercial sensitivity reasons.
Around a third of those who are impacted will receive a worse rate of interest, while two-thirds will be better off or see their interest rate remain the same.
The massive reshuffle means some people will see their rates squashed to less than a third of what they are getting now.
Lloyds is among several providers to simplify its account range in recent months.
Savers with the accounts affected by Lloyds Banking Group’s move have around £4,000 in them. Those who will see their rate go down are expected to be around 25p a month worse off for every £1,000 they have saved.
The biggest cuts affect the Halifax Web Saver Extra, which pays a rate of 0.95% and Lloyds’ Cash Isa, which pays 0.91%.
Savers who will see the biggest improvement are currently being paid a rate of just 0.1% in a Halifax Online Saver and Web Saver account or 0.1% in one of Lloyds’ eSavings and Internet Saver deals.
Customers will be written to in waves, starting next week with those who are with Lloyds and Halifax.
The first accounts will move in around February or March and the process is expected to continue across next year.
A spokeswoman for Lloyds Banking Group said: “Providing a simpler range of accounts for our customers means that they can make the most of their savings in a simple, clear and easy way.”
In August, it emerged that 1.6 million Isa customers with Barclays were to be moved on to a worse rate while a further 740,000 would receive the same or more interest as the bank simplified its product range and swept aside some older products.
Earlier this year, NatWest and sister bank Royal Bank of Scotland (RBS) moved three million Isa savers off older deals and on to newer ones, and in February HSBC announced it had scrapped introductory ‘’teaser’’ rates on savings products, saying this would give customers ‘’peace of mind’’ about the returns they would be getting.
Sue Hannums, co-founder of savings rate alert website Savingschampion.co.uk, said banks’ moves towards simplifying their ranges had turned into a “trend”.
But she said this could also be interpreted as “another excuse to cut, in many cases quite substantially, existing savings accounts”.