Hard-pressed savers staying loyal to their banks could be missing out on hundreds of pounds in interest payments because of a stark range of interest rates available on high street accounts.
New research from the digital bank Chetwood Financial has found that only 34% of Brits have opened a new bank account in the past two years, a period when ultra-low interest rates have been swept away by central bank hikes to the base cost of borrowing.
It means that after a long period when shopping around for the best deal barely paid off, now there are proper rewards on offer for the rate-conscious consumer.
Among the best instant-access interest rate out there – according to research by the Standard – is from Goldman Sach’s online account called Marcus. The big-name bank, best known for its high-end dealmaking, is paying out 4.6%. That means a return on deposits of £10,000 of £460 a year.
Compare that to the most parsimonious payback, of £116 from Barclay’s Everyday Saver, at a rate of just 1.16%.
Chetwood found that most savers – 62% of the 2,000 people they spoke to – knew there were better deals on offer, but almost a third of this group did not have time to make a change. Some 15% of them did not know how to.
The research, prepared by Chetwood’s SmartSave platform, also found that three-in-ten people who are planning to move their savings are waiting for interest rates rise further first.
Andy Mielczarek, founder and CEO of SmartSave, said: “UK inflation hit a 41-year high almost a year ago. During this time, Britons’ savings have been diminishing in real-term value.
“Rising interest rates – and the eventual decline of inflation – have promised to reset the balance somewhat, giving consumers the chance to achieve far better returns.”
Nonetheless, the survey also found that almost half of people who have not switched – 46% – are reluctant to go for the gains on offer because they have had accounts with the same bank for five years or more.
That comes at a time when the industry has been at the centre of regulators’ attention for being slow to pass on higher interest rates to savers, especially when compared with the speed at which they have raised the cost of loans and mortgages.
The Financial Conduct Authority hauled the banks in for questioning on that in July. The main UK market watchdog called the meeting “constructive” and said banks “recognised that they needed to do more to help their consumers access the best rates.”
The regulator said at the time: “We now want to see that progress accelerate. We continue to urge savers to shop around to make sure they’re getting the best deal.”
