No interest in saving

By HELEN LOVELESS, MAIL ON SUNDAY ENTERPRISE EDITOR
Updated:

 

SIX out of ten people don't know how much interest they are earning on savings accounts, new research has revealed.

Around 27m people across the UK are in the dark about the amount their bank is paying according to the survey by Intelligent Finance, while the majority of us look no further than our existing bank when we open a savings account.

Thanks to general consumer lethargy high street lenders account for more than 70% of all current accounts, costing us nearly £3bn a year in lost interest.

Despite the recent 0.25% rise in the Bank of England base rate, to 3.75%, the rates offered by the 'big four' - Lloyds TSB, Barclays, Royal Bank of Scotland and HSBC - are among the lowest on the market, ranging from just 0.1% to 0.50% respectively.

These compare poorly to the ING Direct savings account, which will pay interest of 4.3% gross from 1 December - up from the current rate of 4.1%. There is a minimum balance of £1 and you can access your money without penalty.

Alternatively Abbey's internet bank Cahoot pays interest of 4.10% on its easy access savings account, while the IF savings account has an interest rate of 4%. There is a minimum balance requirement of £1 on both accounts.

Grenville Turner, chief executive of Intelligent Finance, believes it is important savers regularly check rates to ensure they don't miss out.

'It takes a lot of discipline for most people to save but a lot less effort to ensure these hard-earned savings earn a decent amount of interest, he says.

'With savings rates picking up again it is now even more important savers are shrewd about their savings decisions.'

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