How a third of savers miss out on interest by keeping their money in a current account
- Three in 10 savers said they never check what their rates are with their own bank
Around a third (34%) of people with savings hold most of this money in a current account, according to a survey which indicates they could be missing out on better returns elsewhere.
Many current accounts do not pay any interest on the balance, although banks and building societies have generally been improving their offerings for savers recently as interest rates climb higher.
People can choose from a variety of savings accounts to suit their needs, such as instant access deals, longer-term deals where money is locked away for a certain period, and tax-efficient Isas.
One in seven (15%) adults have no savings at all, according to the survey, released to mark UK Savings Week 2023 (September 18 to 24).
Many current accounts do not pay any interest on the balance, although banks and building societies have generally been improving their offerings for savers recently
Three in 10 (30%) savers said they never check what their rates are with their own bank or building society and one in 11 (9%) have not reviewed their accounts for a year or more
The research was commissioned by the Building Societies Association (BSA), which also found around a third (34%) of UK savers never compare the rate on their savings accounts to others available in the market.
Three in 10 (30%) savers said they never check what their rates are with their own bank or building society and one in 11 (9%) have not reviewed their accounts for a year or more.
Robin Fieth, chief executive of the BSA, said: ‘As savings rates have been increasing over recent months, shopping around can now make a sizeable difference to the returns available.’
A new consumer duty was recently introduced by the Financial Conduct Authority (FCA), requiring financial firms to put customers at the heart of what they do, including when designing their products and dealing with consumers.
In July, the regulator set out a 14-point action plan to make sure banks and building societies are passing on interest rate rises appropriately to savers.
The FCA wants to make sure savings providers are passing on rate increases and that they are communicating with customers much more effectively and offering them better deals.
Of those who do have savings, the average amount set aside is £21,840.
More than half (52%) of people with money saved said they have less than £12,000.
Opinium carried out two surveys for the BSA, each involving 2,000 people across the UK, in June.
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