UK savers losing £13 billion a year in dead end accounts

A Which? investigation has revealed that UK savers could be losing out on almost £13 billion in interest each year by failing to switch savings accounts, an increase of half a billion pounds since October 2010.

Ahead of World Consumer Rights Day on 15 March Which? is urging savers to switch to get a better deal. We are also calling on the Government to ensure that the new financial regulator, the Financial Conduct Authority, is a watchdog not a lapdog. We want a strong regulator that stands up to the banks, making sure that they offer consumers competitive savings products.

Which? experts found that 41% of the 1,800 savings accounts and cash ISAs available to UK savers are paying a pathetic 0.5% a year or less. One in five savings accounts are paying 0.1% or less. This can add up to just £1 a year for every £1,000 in your account. Current rates of inflation also mean that these accounts may be worth less each day.

Which? chief executive, Peter Vicary-Smith, says:

“Banks and building societies have got away with paying miserable interest on people’s hard-earned savings for too long. Our research has exposed just how widespread this practice is.

“The message to savers is simple: if your money is in one of these low-interest accounts, you should switch now. It’s easy to do, using our free online tool to work out where you’ll get the best deal.”

Which? is supporting Consumer International’s worldwide call to action for consumers to demand more competition in financial services.

Notes to Editor

For a copy of the full Isa article email: meredith.barker@which.co.uk

Which? will be hosting a free online savings surgery on Thursday March 15 from11am–1pm at www.which.co.uk/savingssurgery

Which? online saving tool: www.which.co.uk/savingsbooster

Which? has launched its Watchdog not Lapdog campaign, calling on the Government to make the FCA a strong ‘watchdog’ and not a weak ‘lapdog’, to stand up to the banks. For further see www.which.co.uk/watchdog

Research Notes

In February 2012, Which? researchers compared Isas and standard savings accounts across the UK.

Key findings

  • 41% of the 1,800 savings accounts and cash Isas available to UK savers are paying 0.5% interest a year or less
  • Two in five savings accounts and cash Isas pay 0.1% interest or less
  • Of the 106 instant access cash Isas open to new customers, one in six pays 0.5% or less on a balance of £5,000.

A recent Which? survey showed that 16% of people have had their main savings account for over 10 years. A further 20% have had the same account for over 5 years. Only 18% had held their main savings account for less than a year.

World Consumer Rights Day

World Consumer Rights Day takes place each year on March 15.  It marks the date in 1962 when United States President John F. Kennedy issued the historic Declaration of Consumer Rights. 2012 marks the 50th anniversary of this address.

Which? is a leading member of Consumers International which has 220 members from across the globe

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