British savers losing out by making simple banking mistake

A piggy bank at a home in Ashford, Kent

A piggy bank at a home in Ashford, Kent

Jack Walters

By Jack Walters

Published: 18/09/2023

- 17:59

The average amount set aside by British savers totalled £21,840

Millions of British savers are missing out on raking in extra cash by making a simple mistake, a new survey has revealed.

A poll conducted by the Building Societies Association (BSA) found a third of people hold most of their savings in a current account.

The decision to primarily use a current account could see Britons lose out on interest which could top six per cent.

The best easy access rate pays 5.05 per cent from Paragon Bank.

NS&I also has the top one-year fixed rate at 6.2 per cent.

However, a third of UK savers also admitted to never comparing the rate on their savings accounts to rival offers.

Three-in-10 savers never even check what rates are with their own bank or building society.

Nine per cent also opted not to review their accounts for a year or more.

Monopoly pieces stacked on pound coins and notesInterest rates could continue to soar despite inflation fallingPA

But the polling, which was released to mark UK Savings Week 2023, laid bare interesting statistics about how much Britons keep in their pockets.

The average amount set aside by British savers totalled £21,840.

However, more than half of people have less than £12,000 and one-in-seven adults have no savings at all.

Robin Fieth, chief executive of the BSA, said: “As savings rates have been increasing over recent months, shopping around can now make a sizeable difference to the returns available.”

Bank of England Bank of EnglandPA

The Financial Conduct Authority recently introduced a new consumer duty requiring firms to put customers at the heart of what they do.

The decision includes designing their products and dealing with consumers.

The regulator put forward a 14-point action plan to make sure banks and building societies are passing on interest rate rises appropriately to savers.

The FCA warned nine of the biggest savings providers only passed through 28 per cent of the base interest rate rise on average between January 2022 to May 2023.

Interest rates have been hiked by the Bank of England 14 times since December 2021, as the figure peaked at 5.25 per cent earlier this month.

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