Brits with savings accounts issued £322 warning | Personal Finance | Finance
Brits with savings accounts have been warned they could be losing out on £322 a year. Rachel Springall, finance expert at Moneyfactscompare.co.uk, has told savers not to hesitate to chase a better deal.
She said Brits with “closed” accounts must act now to review their rates and “escape the apathy trap” regardless of any changes to the Bank of England Base Rate (BBR). Even if the BBR were to rise in the coming months, it takes longer for these customers to feel the benefits of interest rate rises. The BBR last rose by 0.25% back on August 3, 2023. It took two months for on-sale savings deals (easy access and easy access ISAs) to catch up, but it took four months for those with a closed easy access ISA to see an improvement. She added that savers will earn more by taking advantage of higher rates on on-sale accounts than in closed accounts, with half of UK savings accounts on the market beating the current BBR of 3.75%.
Springall said: “Apathy is dangerous when it comes to maximising interest returns, so savers need to feel inspired to shop around to take advantage of top rates.
“The best deals are typically offered by challenger banks and mutuals, and they work incredibly hard to entice new business. Building societies are also consistent and offering a fair value, in line with their principles to support their members.
“Savers who have their nest egg in a closed account could be missing out more than they realise, and they could see the real value of their cash diminish should inflation spike.
“However, they could hold out for longer with real returns by proactively switching to on sale accounts, offered by providers who breathe life into the savings market.”
A closed easy access account will be earning just 2.39%, which results in a loss of £322 a year compared to investing £20,000 into an account earning 4%.
Springall said: “This could be even worse if the cash has been languishing in an old account paying a paltry rate, so it’s wise to review any accounts at least once every six months or so.”
