Amidst the ongoing cost of living crisis, millions of Brits are missing out on over £1,000 extra income per year due to their savings languishing in low- or no-interest current accounts.
An investigation by Yorkshire Building Society has revealed that over £366 billion is sitting in UK current and savings accounts earning returns of 1% or less.
Despite the rising costs of everyday expenses, many are failing to maximize their savings. The data shows nearly 13 million current accounts in the UK hold balances above £5,001, with the average balance in these accounts being a substantial £23,700. This significant amount of money could be generating much higher returns if moved to better-paying accounts.
Almost a fifth (17%) of people in Derbyshire have never checked the interest rate on their savings. Even more concerning, over half (55%) haven’t moved their savings in the last year, missing out on potentially hundreds of pounds in interest. This inertia is costing savers dearly at a time when every penny counts.
The new research also highlights that more than a third (36%) of people in Derbyshire keep their savings in their current accounts, where they often earn little to no interest. Although almost three-quarters (72%) have checked their savings account interest rates in the past six months, the fact remains that millions are still not taking action to optimise their savings.
Over half of respondents who keep their savings in a current account stated the reason they leave money in their current account is they like to be able access the cash if needed. Yet with so many easy access savings accounts now available there are other options to keeping cash accessible yet earning a higher interest return.
A statement by YBS emphasises the urgency of the situation, noting that keeping large amounts of funds in low-paying current accounts has become a costly mistake for millions. Despite significant increases in the Bank Rate, many people are still missing out on substantial savings interest. In this cost of living crisis, it’s crucial for savers to review their accounts and make their money work harder.
Despite banking options, two fifths (38%) of people believe that most providers keep their rates in line with the bank of England rates yet just 40% are “satisfied” with the interest rate they are earning on their savings.
Over half (55%) of people admitted they haven’t changed where they save money in the last twelve months and almost a fifth (17%) said they have never reviewed their savings interest - even though savings rates have risen to the highest they have been in a decade.
Almost a fifth (19%) of people don’t think it’s worth moving their money and over 1 in ten (13%) can’t be bothered with the hassle of moving their money. Almost half (49%) of people believe they are happy with their current provider. . Last year, 55% (963 out of 1737) of respondents have not changed where they save their money at all. Only a smaller fraction of respondents have changed their savings location multiple times - 13% (220 out of 1737) twice, and 6% (104 out of 1737) three or more times. This suggests a minority is more active or responsive to changing financial circumstances or opportunities.
7% say they don’t move to avoid losing interest, 5% think they haven’t got time to move their money and 3% think they aren’t allowed to. Furthermore, 66% don’t even know what the personal savings allowance is.
A call has been issued for savers to take immediate action to review their financial situations and move their money to accounts offering higher interest rates. With inflation eroding the value of stagnant savings, making the switch could significantly enhance one’s financial resilience in these challenging times.
Keeping your keyless vehicle secure
Work to tackle spiking showcased as national campaign begins
This ISN’T a ‘Love Train’ – Northern reveals reason dating apps are blocked by on-board WiFi
