Bank customers urged to ‘take action’ as thousands ‘missing out’ on £449 savings interest boost

Bank customers urged to ‘take action’ as thousands ‘missing out’ on £449 savings interest boost

Greg Smith issues warning about tax on savings interest

GB NEWS
Patrick O'Donnell

By Patrick O'Donnell


Published: 17/01/2024

- 17:11

Savings interest rates have risen following actions taken by the Bank of England but many Britons are losing out on the benefits

Britons are being urged to “take action” to avoid “missing out” on a savings boost worth £449.

Coventry Building Society has examined Bank of England data which revealed £253billion of household savings has been “abandoned” in zero interest, easy access accounts.


This is the equivalent to £449 in lost interest on average for every household in the UK despite the central bank’s base rate being the highest its been in 15 years.

Savers have benefited from interest rates being hiked to 5.25 per cent but many bank customers are not taking advantage of the current climate.

Woman worried while on the phone

Britons are 'missing out' by not claiming savings interest

GETTY

Jeremy Cox, the head of strategy at Coventry Building Society, warned that billions of pounds are being “abandoned” in low interest rate accounts.

He said: “Many will also have savings languishing in low paying accounts, meaning that households are missing out on not just hundreds, but potentially thousands of pounds worth of saving interest.

“Savings interest rates of around five percent are still readily available following a run of 14 consecutive Bank of England base rate increases during the past two years.

“The start of a new year brings an opportunity for people to take action and get their finances into better shape. Spending a little bit of time to shop around and move money to higher rate paying accounts will make a sizable difference to people’s savings pots.”

Coventry Building Society reports than an additional £12.7billion worth of interest would go to households if this money was moved from a zero paying rate and put into an account earning five per cent.

The Bank of England’s latest statistics show a £5.6billion rise to over £1.75trillion in the total amount of household savings kept in current accounts, easy access products, fixed rate bonds and cash ISAs in November compared to the month before.

Furthermore, the central bank’s figures revealed that £264billonn is now held in fixed accounts or bonds which is an increase of £3billion.

A similar growth rate of £3.3billion in cash ISAs to £332billion was also seen in November with savers looking to grab higher interest deals as soon as possible.

Bank of England base rate chart shows interest rates since 2017The Bank of England base rate is currently at a 15-year high GB NEWS

There was also a noticeable reduction of £1billion in the amount in easy access accounts compared to the previous month.

As well as this, easy access savings have reduced by £109billion over the last 12 months, according to the Bank of England’s figures.

Coventry noted that some of this would be due to bank customers moving their money into fixed savings and ISAs.

However, the building society acknowledged that the rise in the cost of living could also be a factor and hurting peoples’ “day-to-day” finances.

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