How a third of savers miss out on interest by putting their money in a checking account
- Three in ten savers indicate that they never check their rates with their own bank
About a third (34%) of people with savings keep most of this money in a current account, according to a study that suggests they could be missing out on better returns elsewhere.
Many current accounts do not pay interest on the balance, although banks and building societies have generally improved their offerings for savers recently as interest rates rise.
People can choose from a variety of savings accounts to suit their needs, including instant access deals, longer-term deals where money is locked up for a set period, and tax-efficient Isas.
One in seven (15%) adults have no savings at all, according to the research published to mark UK Savings Week 2023 (September 18 to 24).
Many current accounts do not pay interest on the balance, although banks and building societies have generally improved their offerings for savers in recent times
Three in ten (30%) savers say they never check their rates with their own bank or building society, and one in eleven (9%) have not checked their accounts for a year or more
The research was commissioned by the Building Societies Association (BSA), which also found that around a third (34%) of British savers never compare the interest rates on their savings accounts with those on the market.
Three in ten (30%) savers say they never check their rates with their own bank or building society and one in eleven (9%) has not checked their accounts for a year or more.
Robin Fieth, chief executive of the BSA, said: ‘With savings rates rising in recent months, shopping around can now make a significant 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 drew up a fourteen-point action plan to ensure that banks and building societies appropriately pass on interest rate rises to savers.
The FCA wants to ensure that savings providers pass on rate increases and that they communicate much more effectively with customers and offer them better deals.
Of those who do have savings, the average amount put aside is £21,840.
More than half (52%) of people with savings said they have less than £12,000.
Opinium conducted two surveys for the BSA in June, each involving 2,000 people in the UK.