Bank explains simple way to boost cash in savings by £985 a year without adding more money | Personal Finance | Finance

Britons can boost their savings by nearly £1,000 by simply moving their cash to a higher-paying interest account.

A new analysis by Paragon Bank of CACI data showed 261,000 interest-bearing adult accounts containing £10,000 or over earned one percent or less in July 2024.

Over 8,500 accounts boasting balances of £100,000 or above were earning that figure, rising to 42,700 accounts containing £50,000 or above.

Collectively, Paragon said these savers are missing out on £258 million in savings interest each year. By value, CACI data shows that £8.6 billion is held in the quarter of a million accounts, creating an average balance of £32,811.

Based on one percent interest, the average account could expect to earn £328.11 in interest over a year, or collectively £85.9 million.

If that balance was transferred to an account paying four percent, the interest payment would increase to £1,312.42 over the year, or £343.8 million overall annually. This reflects a staggering £984.31 difference.

Across the overall adult cash savings market, 2.3 million interest-bearing savings accounts are worryingly earning one percent or below, equating to £10.1 billion.

Derek Sprawling, managing director of savings at Paragon Bank, said: “Given the range of providers paying generous rates of interest available across the market, it’s remarkable there are still savers with large balances still accepting returns of one percent or below.

“These savers are seeing their money shrink in real terms as their return remains below inflation and, collectively, are missing out on over £250 million in interest.

“The savings switch message can often get ignored by those with smaller balances, which can be understandable given the relatively small increase in returns.

“But, those with sizeable deposits have a real and genuine incentive to move their money.”