Price of being loyal now costs savers £1,000

·2-min read
Savings Accounts Bank Rate Interest Low-Paying
Savings Accounts Bank Rate Interest Low-Paying

Savers could lose £1,000 by sticking with low-paying accounts that are failing to pass on increases in the Bank Rate, which reached 2.25pc on Thursday.

The top easy access savings account now pays 2.1pc, but Britain’s biggest banks are only offering rates between 0.1pc and 0.75pc on balances of £50,000.

This is despite seven consecutive increases in the Bank Rate, which has climbed from 0.1pc last December to its highest level since 2008.

Santander is offering one of the lowest rates on the market, leaving its Everyday Saver customers with returns of just 0.1pc, according to Moneyfacts, an analyst.

TSB and Barclays account holders are faring only marginally better, with yields of 0.25pc.

Nationwide pays 0.35pc, while NatWest’s accounts pay 0.4pc and 0.5pc.

These rates are lower than the average for easy access accounts, which is 0.79pc, according to Savings Champion, an analyst.

Savers who put £50,000 in the top easy access account, offered by Al Rayan Bank, would earn £1,050 in interest.

By contrast, those with the same balance in Santander’s Everyday Saver account would receive £50.

The easy access rates offered by Britain’s seven biggest banks and building societies are lower than the average, which is 0.79pc, according to Savings Champion, an analyst.

Average rates have risen by 0.64 percentage points since December.

Laura Suter, of broker AJ Bell, said many savers will need to switch accounts to see the benefit of rising interest rates.

“If savers do nothing, they will get nothing,” she said. “Banks don’t have to increase their savings rates, and many won’t, instead preferring to use the base rate rise to boost their profits.”

Sarah Coles, of broker Hargreaves Lansdown, said smaller and newer banks are working harder to attract new customers by offering better rates.

“You could make around five times as much interest by moving to the most competitive account,” she said.

“If you’re with a particularly measly account you could make 20 times the interest by switching.”