People with savings accounts issued £992 warning | Personal Finance | Finance
Brits with savings have been warned that they could be losing out on hundreds of pounds by keeping their money in a low-interest-paying account. A new survey by Hargreaves Lansdown found more than half of Brits (56%) have not moved any of their savings in the last year. A third admitted to not moving them in the last five years, and a huge quarter has never moved them at all.
People have been urged to consider switching accounts to earn better returns. Sarah Coles, head of personal finance at Hargreaves Lansdown, said savings inertia – the tendency for people to stick with their current, often low-interest, savings accounts when better options exist – is “dangerous at times like this”. This is because interest rates are dropping and high street bank accounts are falling behind inflation.
Ms Coles said: “Over the last few years, savings rates have soared and then fallen, so it’s shocking that throughout it all, a third of people haven’t moved their savings at all over at least the past five years.
“The whole notion of switching is off the table for millions of people. Almost a quarter of savers have never switched their savings, and two-fifths don’t have any plans to switch at any point in the future.”
The risk associated with leaving your cash in a high street savings account, which pays an average of 1.15% or just 1%, is that with inflation at 3.6%, the spending power of your savings declines every month.
Ms Coles added: “The high street giants have been far quicker to cut rates than the most competitive on the market, so the gap has opened significantly.
“The most competitive is offering 4.5% on easy access savings accounts, and the average high street account (branch accounts open to everyone) is offering just 1.15% on £20,000 of savings.
“As a result, if you have £20,000 in an average branch-based high street easy access account, inertia is costing you £688 a year.”
With 20% of the highest earning households in the UK holding an average of £29,898 in savings, based on HL Savings and Resilience Barometer 2025, the losses are even more significant. According to Hargreaves Lansdown’s calculations, the difference between the average high street banks’ 1.15% and the best on the market (4.5%) would cost them £992 a year.
Shopping around for the best possible interest rate is the next thing to do. According to Ms Coles, the most competitive deals tend to be available from online banks and cash savings platforms.
She said: “You also need to be honest with yourself when choosing a new account. Some people will be able to keep track of a portfolio of accounts with different banks and have the energy to shop around and open new ones when they expire. Others start with good intentions but get overwhelmed.
“If there’s a chance that’s you, consider using a savings platform to make it easier to keep an eye on everything in one place and switch between banks without having to complete new paperwork.”
