A staggering £230 billion is sitting idle in UK savings accounts, offering no return despite better options being available. Research by Spring reveals that 340,000 accounts hold over £100,000 without earning a penny in interest, while the average balance in the 6.5 million accounts above £10,000 is £35,428. The issue seems rooted in habit, with many savers sticking to their main current accounts out of convenience or confusion. Derek Sprawling from Spring calls this trend alarming, highlighting how it erodes the real value of people’s savings.
The Pounds and Pence Cost of Inertia
The financial penalty for doing nothing is significant and can be illustrated with simple arithmetic. According to Spring‘s analysis, the average balance among zero-interest accounts with more than £10,000 is £35,428, meaning those savers are missing out on substantial returns that are readily available elsewhere in the market.
The banks continue to benefit directly from that reluctance. With £324.8 billion currently held in current accounts paying no interest, and a further £71.3 billion sitting in savings accounts earning one per cent or less, the financial institutions holding these funds are effectively being handed free money by customers who fail to act.
The reasons for staying put are varied but revealing. Among those surveyed, many keep their savings with an account provided by their main current account provider, whilst a fifth keep their savings in the current account itself. As Derek Sprawling put it, in a higher-rate environment, doing nothing can be incredibly costly.
He added that even small changes, like moving surplus cash into a competitive savings account, could make a meaningful difference to people’s finances. The situation leaves millions of savers at risk of seeing the real value of their money eroded by inflation, the research warns.
Why Doing Nothing Is a Secision with Consequences
The argument for action has become more urgent as the economic landscape shifts. With inflation still running, any cash not keeping pace is shrinking in real terms. Spring’s research indicates that a significant proportion of UK savers are failing to maximise their returns, with many keeping their money in low-interest accounts due to a combination of habit, fear and confusion. The findings suggest that this is not simply a matter of laziness, but rather a reflection of the overwhelming nature of the choices available.
The data shows that hundreds of thousands of accounts contain more than £100,000 without earning a penny in interest, representing a significant annual loss in real terms. Derek Sprawling of Spring noted that it is staggering that over six and a half million current accounts hold over ten thousand pounds and are earning absolutely nothing. As the research makes clear, doing nothing is itself a decision, and for millions of UK savers, that decision is proving incredibly costly.
