Savers could be losing £400 from their accounts this year and not even know it.
That's the urgent warning from financial experts - as a massive £116billion worth of fixed-rate savings accounts are set to mature in 2025.
It's a situation that could affect millions of UK savers who locked in attractive rates when interest levels were higher. Now they could face a plunge in their returns that could seriously dent their finances.
Someone with £20,000 in savings could see their annual interest income drop by more than £400 if they do not take action, in what experts are calling a "rate shock", as many fixed deals come to an end.
Kevin Mountford, co-founder of Raisin UK, warns that savers risk "sleepwalking from 4.5 per cent to 2.5 per cent" interest rates.
When fixed-rate accounts mature, banks often automatically move customers onto much lower default rates.
This applies to accounts opened during the higher interest rate environment, and most people might not notice until too late.
British savers stand to lose an estimated £2.3billion over the next twelve months if they fail to act when their fixed-rate deals expire.
It's a situation that could affect millions of UK savers who locked in attractive rates when interest levels were higher
|GETTY
Research from Raisin's Great British Savings Report shows that 53 per cent of Brits did not move any money last year.
That is more than half the nation who could be caught out by plummeting rates.
Many savers have what Mr Mountford calls "money moving paralysis".
This is where people worry that switching accounts will be complicated or time-consuming, so they stick with their current bank. A loyal decision that prove costly.
People worry that switching accounts will be complicated or time-consuming, so they stick with their current bank
| GETTY IMAGESWhen a fixed deal ends, savers are often shifted onto a standard variable rate (SVR).
With £116billion worth of accounts maturing this year, millions of savers may need to act.
The difference between switching accounts now and doing nothing could be hundreds of pounds in lost interest.
The drop from 4.5 per cent to 2.5 per cent represents a 44 per cent reduction in interest earnings.
For someone with modest savings, that could have covered several months of energy bills or a family holiday.
Better rates could still be available, but many people do not know where to look.
Mr Mountford said: "Loyalty may feel safe, but in savings it is usually costly, and your bank's default option is rarely the best one."
"People worry switching will be too complicated, but with digital marketplaces it takes only minutes to bag a better rate."
Better rates are still available, but many people do not know where to look
| PAMany may still hesitate, assuming it will be complicated.
Short-term fixed deals, which Mr Mountford calls "micro-fixes", could offer a middle ground.
He compares them to "a power nap for your money" – long enough to earn decent returns without locking funds away for years.
Another approach is "laddering", where savings are split across different terms. This can allow regular access to portions of money whilst still benefiting from better rates.