There's nothing worse than squirreling away your hard-earned cash into a savings account, only to find that the returns you're getting are miserable. Unfortunately, that fear doesn't always encourage people to be proactive when it comes to their savings, and many are instead putting up with laughable returns – and they may not even realise it.
Research from Scottish Friendly has highlighted this problem of complacency. According to their calculations, as much as £65bn could be stagnating in low-rate savings accounts because people stick with those tied to their current account, rather than seeking out better-paying alternatives.
This is despite the fact that high street banks are known for offering paltry rates – in some cases as low as 0.05%. What's even more concerning is that one in three savers haven't reviewed their accounts in the last three years, a particularly worrying statistic given that a lot of accounts come with short-term bonuses, typically lasting for only 12 months. After the bonus period has come to an end, your rate could plummet – and if you weren't on the ball, you'd easily lose out.
Neil Lovatt, director of financial products at Scottish Friendly, said: "Times are hard right now and we're all feeling the pinch. It's important to ensure we're doing as much as we can to build a nest egg for the future – after all, what is the point in putting your hard earned money into an account that gives back just 0.05%?"
It isn't like those savers think they're doing well, either. Of those who haven't reviewed their account in the last year, just 8% thought they were still getting the best rate on the market. Given this lack of confidence, why would you want to stick around?
Apparently, a lot of it could come down to general apathy. According to the survey, 15% of savers failed to change their account in the last year because they thought it was too much hassle, while 21% thought that because they didn't have a lot of money in the account it wasn't worth the trouble of moving.
Really, this couldn't be further from the truth. Even small amounts can soon add up, particularly with compound interest added into the equation, which makes it even more important to make sure you've got the best rate possible.
Lovatt continued: "The perception that the act of changing accounts is an onerous one is flawed. In fact, it doesn't take long to have a look at what's out there, and it is a valuable process.
"A low-interest sloth account is about as much use to savers as a chocolate teapot. We're calling on today's savers to take some time to consider their options. People who shop around stand a much better chance of seeing their money grow."
Comparing savings accounts needn't take a lot of time, but it can make all the difference to your returns. Opting for lesser-known names rather than high street banks could be all it takes to secure a better rate, but you may also want to consider the alternatives.
High interest current accounts, for example, can offer as much as 5% interest, far more than any savings account on the market, and although there'll be some caveats (such as maximum balances or time limits) they could definitely prove worthwhile.
No matter what solution you choose, it's all about making your money work harder. A quick check of the comparison tables could be all it takes, and if you regularly review your account, you can be confident you're getting the best returns possible.
Find the best savings account for you.
Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.
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