The review of the £1trn market will look at issues including the effects of introductory interest rates called ‘teaser rates’, and at how often consumers switch their savings accounts to determine what the regulator can do to ensure consumers get the best possible outcomes.

The FCA has a statutory objective to promote effective competition in the interest of consumers and will undertake a number of reviews into various financial markets to assess competition in the near future.

It will also invite evidence early next year as part of a ‘wholesale strategic review’ to look at the way competition works between firms in financial services.

The FCA has appointed Deb Jones and Mary Starks as directors of competition to head the programme.

Chief executive Martin Wheatley said: “Promoting effective competition and ensuring that markets work well for consumers is a key objective for the FCA.

“We will be undertaking a programme of work and research that will enable us to have a better understanding of how the markets are working and the dynamics that drive both them and the decisions that consumers make.

He added: “In looking at cash savings, we will examine an area that affects most people and see if there is action we need to take. This is exactly the sort of area I want the FCA to be operating in.

“We know that switching rates are low for financial services products and savings accounts are no exception. Even when people do switch their accounts, they are twice as likely to go with their existing provider than move to the offering of a competitor.”

The FCA is already undertaking a thematic review into annuities. It will now consider whether a market study is required following the review as part of this new programme of work.