£641 warning issued to TSB, Barclays and Santander customers

Households could be missing out on hundreds of pounds a year because of the savings account they are using, finance experts have warned. People keen to build up a savings pot have been advised to shop around for accounts offering the best interest rates.

That's because they could effectively be missing out on free money the longer time goes on. Those with savings accounts which have the worst rates could lose out on as much as £641 a year on average compared to the top rates.

That's based on someone who has the £17,000 average savings amount. The 20 worst easy savings accounts offer an average rate of just 1.27%, according to research by MoneyComms, while the best rates can climb above 5%. Accounts with the worst rates include the TSB Save Well, Barclays Everyday Saver and Santander Limited Access, they said.

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These banks may offer better rates on other savings accounts, however, making it important to look around to see what's on offer. Alastair Douglas, from the company, said: “The average saver could be missing out on more than £600 per year — which is a considerable amount, given how much the cost of living has increased. The extra income could be used to cover bills and expenses, left in savings so it continues to grow, or be put towards a special purchase.

“Double check your rate and make sure your money’s working for you. Loyalty doesn’t pay, and if your bank isn't paying you, then they’re making money from you. Don’t be worried about moving your balance to a smaller bank either, as long as they’re registered with the Financial Services Compensation Scheme, £85,000 of your money should be covered.

“If you’re struggling to save, then consider downloading a personal finance app which can let you connect an account via open banking. It should give you better insights into your finances, so you can avoid missing payments, dipping into your overdraft, or impacting your credit score. That way you can cut back on costly mistakes, and start moving forward.

“Whoever’s in charge of the country come July 5, let’s hope they start delivering on their promise to deliver economic stability — with a focus on kick-starting people’s personal finances. Workers are now more than £10,000 a year worse off than they were in 2008. Something which will have impacted not just their ability to spend, but also to borrow and save.”