New figures present that there’s £257.8bn languishing in accounts paying no curiosity in any respect leaving savers lacking out on £13.6bn a yr in curiosity.
That’s nearly doubled in a yr from an equal £7.4bn final October, in line with Hargreaves Lansdown.
The issue is that greater than 1 / 4 (27%) of individuals have by no means switched financial savings accounts for a greater charge and nearly half (49%) haven’t any plans to modify at any level, the funding supplier mentioned.
Its analysis confirmed that the most typical motive for not switching was as a result of individuals assume they’ve the very best charge already (28%), adopted by the very fact they belief their financial institution (27%) after which the effort concerned in switching (17%).
A yr in the past a 3rd of individuals mentioned they didn’t change as a result of charges have been too low to trouble with. That determine has now fallen to 17% as charges have risen a lot within the meantime. Final October, the very best quick access financial savings accounts have been paying lower than 3%, whereas now they’re paying greater than 5%.
Sarah Coles, head of non-public finance at Hargreaves Lansdown, mentioned: “Sticking with quick access department accounts run by the excessive road giants paying depressing ranges of curiosity is costing savers a fortune.”
The analysis instructed the largest motivation for individuals to remain put is as a result of they assume they have already got the absolute best charge (28%).
Ms Coles mentioned: “This can be the case for some, however on condition that the lion’s share of cash remains to be within the quick access accounts of the massive excessive road giants, and the overwhelming majority of them pay a fraction of what’s accessible from newer on-line banks, there’s an affordable likelihood others simply don’t realise how rather more charges have risen elsewhere.”
The second commonest motive for cash languishing in depressing accounts is that folks belief their financial institution (27%). However on condition that newer banks often supply the very best charges, savers want to think about how a lot curiosity they’re dropping by selecting to not belief a financial institution on the grounds it doesn’t really feel as acquainted, mentioned Ms Coles.
*Calculations primarily based on incomes 5.15% in an quick access account. Financial savings information from the Financial institution of England’s most up-to-date figures (September) and switching information from a survey of two,000 individuals by Opinium for Hargreaves Lansdown in October 2023.