{"id":120946,"date":"2026-05-27T07:30:00","date_gmt":"2026-05-27T06:30:00","guid":{"rendered":"https:\/\/en.econostrum.info\/uk\/?p=120946"},"modified":"2026-05-27T00:49:47","modified_gmt":"2026-05-26T23:49:47","slug":"savings-wrong-account-cost-hundreds","status":"publish","type":"post","link":"https:\/\/en.econostrum.info\/uk\/savings-wrong-account-cost-hundreds\/","title":{"rendered":"Keeping Your Savings in the Wrong Account Could Cost You Hundreds"},"content":{"rendered":"

Millions of Britons are losing money on their savings because their bank accounts pay less interest than the current rate of inflation<\/strong>. Experts say many households are unknowingly missing out on hundreds of pounds every year by leaving cash in low-paying accounts.<\/p>\n

Billions of Pounds Are Sitting in Low-Interest Accounts<\/h2>\n

New analysis based on CACI data<\/strong><\/a> and published by savings app Spring shows that around \u00a3612.4 billion<\/strong> is currently held in savings accounts paying 3 per cent interest or less<\/strong>. At the same time, UK inflation is running at 3.3 per cent<\/strong>, meaning many savers are effectively losing purchasing power even if their account balances continue increasing on paper.<\/p>\n

The figures cover around 69.4 million savings accounts<\/strong>, with the average balance in accounts earning 3 per cent or less<\/strong> standing at approximately \u00a38,812<\/strong>. For many households, the issue is not a lack of savings but where the money is being held.<\/p>\n

Savers Could Be Missing Out on Hundreds of Pounds<\/h2>\n

The difference between low-paying accounts and more competitive deals has become substantial. Someone with \u00a310,000 saved<\/strong> in an account paying just 1 per cent interest<\/strong> would earn only \u00a3100 over a year<\/strong>. By comparison, a competitive easy-access account paying around 3.82 per cent<\/strong> could generate approximately \u00a3382,<\/strong> creating a gap of more than \u00a3280 annually.<\/strong><\/p>\n

For savers holding larger balances, the difference grows rapidly over time. According to the data, around \u00a3538.9 billion<\/strong> is sitting in accounts containing more than \u00a310,000<\/strong>, while roughly \u00a3185 billion<\/strong> is held in accounts with balances exceeding \u00a3100,000<\/strong>, all earning below 3 per cent interest.<\/strong><\/p>\n

Many traditional high street banks continue offering rates between 1 per cent<\/strong> and 2 per cent,<\/strong> substantially lower than some online competitors.<\/p>\n

\"saving\"
Credit: Econostrum<\/figcaption><\/figure>\n

<\/h2>\n

Inflation Is Quietly Reducing Spending Power<\/h2>\n

Financial analysts warn that inflation can erode savings much faster than many consumers realize. Even if account balances rise slightly each year, prices may still increase at a faster pace, reducing what the money can actually buy in the future.<\/p>\n

Hargreaves Lansdown<\/strong> analyst Clare Stinton warned to \u00a0Independent<\/a> that the long-term effect of inflation on cash savings is frequently underestimated. She noted that an item costing \u00a310 in 2016<\/strong> would now cost around \u00a314,<\/strong> illustrating how inflation steadily reduces purchasing power over time.<\/p>\n

Calculations from Hargreaves Lansdown also show how interest rates dramatically affect long-term savings growth. A \u00a35,000 balance earning 3 per cent interest<\/strong> would grow to approximately \u00a35,808 after five years<\/strong>, compared with roughly \u00a36,259 at a 4.5 per cent rate.<\/strong> Over 15 years,<\/strong> the difference becomes even larger.<\/p>\n

\"Savings\"
Credit: Econostrum<\/figcaption><\/figure>\n

<\/h2>\n

Many Savers Stay With Banks Out of Habit<\/h2>\n

Experts say one of the biggest reasons people lose money on savings is simple inertia. Research from Spring found that around 31 per cent of savers<\/strong> keep money with their existing bank out of habit, while others worry about losing quick access to their funds if they switch accounts.<\/p>\n

Financial experts describe this situation as a \u201cloyalty penalty<\/em>,\u201d where long-term customers often receive weaker rates than new customers or those actively comparing deals. Moneyfacts also reported that some older easy-access savings accounts still pay less than 1 per cent interest.<\/p>\n

According to analysts, easy-access accounts paying more than 4 per cent remain available in the current market, while some fixed-rate products and ISAs<\/a> are offering rates closer to 4.5 per cent. For many households, simply reviewing an old savings account could lead to noticeably better returns over the coming years.<\/p>\n","protected":false},"excerpt":{"rendered":"

Britons are saving more money than ever, yet millions could still be falling behind financially. Experts warn that keeping cash in low-interest savings accounts is quietly reducing the real value of household savings as inflation continues outpacing returns.<\/p>\n","protected":false},"author":6,"featured_media":120949,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[44],"tags":[],"class_list":["post-120946","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news","generate-columns","tablet-grid-50","mobile-grid-100","grid-parent","grid-33","no-featured-image-padding"],"_links":{"self":[{"href":"https:\/\/en.econostrum.info\/uk\/wp-json\/wp\/v2\/posts\/120946","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/en.econostrum.info\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/en.econostrum.info\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/en.econostrum.info\/uk\/wp-json\/wp\/v2\/users\/6"}],"replies":[{"embeddable":true,"href":"https:\/\/en.econostrum.info\/uk\/wp-json\/wp\/v2\/comments?post=120946"}],"version-history":[{"count":1,"href":"https:\/\/en.econostrum.info\/uk\/wp-json\/wp\/v2\/posts\/120946\/revisions"}],"predecessor-version":[{"id":120950,"href":"https:\/\/en.econostrum.info\/uk\/wp-json\/wp\/v2\/posts\/120946\/revisions\/120950"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/en.econostrum.info\/uk\/wp-json\/wp\/v2\/media\/120949"}],"wp:attachment":[{"href":"https:\/\/en.econostrum.info\/uk\/wp-json\/wp\/v2\/media?parent=120946"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/en.econostrum.info\/uk\/wp-json\/wp\/v2\/categories?post=120946"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/en.econostrum.info\/uk\/wp-json\/wp\/v2\/tags?post=120946"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}