Brits urged to act as a quarter have never switched savings account despite record rates
Savers have been urged to be more proactive as new research shows nearly a quarter have never switched to a different savings account or opened an additional one.
A Censuswide survey commissioned by specialist lender Shawbrook found 24 per cent of savers may be losing out on hundreds of pounds by not taking advantage of better deals.
Nearly half (46 per cent) of savers said they had not switched or opened a new account in the last year, despite the record rates on offer for most of 2023.
Some fixed-rate savings accounts offered more than six per cent last year. Although similar accounts have fallen to around five per cent today, they still beat inflation and the market remains competitive.
Almost a quarter (23 per cent) of savers who said they had previously switched did so more than 12 months ago, with just one in three (32 per cent) switching in the last six months.
Around a quarter (24 per cent) of active savers who never switched said they had an average interest rate of 2.2 per cent.
“The uplift in rates seen over the past year will hopefully shake any saver’s apathy to compare deals, but it is worrying to see some savers out there have not switched accounts,” Rachel Springall, finance expert at financial information website Moneyfacts, told City PM
“Most high street banks pay less than four per cent on their easy access accounts, so savers would be wise to reconsider their loyalty, as the convenience of using them is costing consumers better interest rates they could be earning elsewhere.
Shawbrook pointed out that by moving £10,000 from an account paying 2.2 per cent to an easy access account paying five per cent – currently the leading deal among less familiar brands – customers could add £280 to their savings.
Springall noted that although lenders offering these better rates were less familiar, they still have the same protections in place as the big banks under the Financial Services Compensation Scheme.
She added: “It will be down to savers to compare the rates on offer and move their money, so it is wise to review any accounts often and not presume they will see their rate rise in line with market movements.”
Fixed savings rates in November fell across the board for the first time in more than two years, according to Moneyfacts, as the Bank of England makes progress in its battle against inflation.
More than a quarter (26 per cent) of those surveyed who had not switched savings account said there was no reason to, while 34 per cent opted to stick with the bank they knew.
Around 15 per cent did not think other offers were good enough to make a difference, with 21 per cent saying that did not have time or it was not worth the effort to switch.
Some 31 per cent said they were satisfied with their current deal. Almost one in ten (nine per cent) said they wanted to use their existing savings.
“Holding onto that same old savings account is like leaving money on the table. Loyalty might be costing you big time and it might only take a few minutes to open a new savings account,” said Adam Thrower, head of savings at Shawbrook.
“If you’re not tapping into your savings right away but might do soon, you can still earn decent returns with an Easy Access account, so, why not make some money in the next few months? Whatever’s holding you back, it’s time to act – those higher rates won’t last forever.”
Money.co.uk savings accounts expert Lucinda O’Brien urged savers to act quickly for a “financial boost” if their money was earning little to no interest
She added: “Compare savings accounts to find the highest rates, but take note of any withdrawal restrictions or minimum deposits as this could impact your final decision. For example, if you opt for a high-interest notice-savings account, you might have to wait up to 200 days before accessing the money.
“The good news is there are still competitive rates on easy access accounts, which normally include unlimited withdrawals and some can be opened with just £1.”