A new Which? investigation reveals that UK savers could be losing out on almost £13 billion in interest each year by failing to switch savings accounts, an increase of half a billion pounds since October 2010.
Our analysis found that 41% of the 1,800 savings accounts and cash Isas available to UK savers are paying a pathetic 0.5% a year or less.
Worse still, one in five savings accounts are paying 0.1% or less. That’s just £1 a year in interest for every £1,000 held in your account. Current rates of inflation mean that these accounts are actually losing value each day.
Banks paying ‘miserable interest’ on savings
Which? chief executive, Peter Vicary-Smith, says: ‘Banks and building societies have got away with paying miserable interest on people’s hard-earned savings for too long. Our research has exposed just how widespread this practice is.
‘The message to savers is simple: if your money is in one of these low-interest accounts, you should switch now. It’s easy to do, using our free online tool to work out where you’ll get the best deal.’
- To help you get the best from your money, Which? will be hosting a free online savings surgery this afternoon from 11am to 1pm.
Key findings of our savings and cash Isa research
In February 2012, Which? researchers compared Isas and standard savings accounts across the UK. We found:
- 41% of the 1,800 savings accounts and cash Isas available to UK savers are paying 0.5% interest a year or less
- One in five savings accounts and cash Isas pay 0.1% interest or less
- Of the 106 instant access cash Isas open to new customers, one in six pays 0.5% or less on a balance of £5,000
A recent Which? survey showed that 16% of people have had their main savings account for over 10 years, so could be missing out on the best savings and cash Isa deals. A further 20% have had the same account for over five years. Only 18% had held their main savings account for less than a year.
World Consumer Rights Day
Today is World Consumer Rights Day, which marks the date in 1962 when United States President John F. Kennedy issued the historic Declaration of Consumer Rights.
To mark the 50th anniversary of this address, Which? is urging savers to switch to get a better deal and is calling on the government to ensure that the new financial regulator, the Financial Conduct Authority, is a watchdog not a lapdog. We want a strong regulator that stands up to the banks, making sure that they offer consumers competitive savings products.