A third of people hold most of their savings in a current account, making a simple mistake that sees them lose out on interest that could top 6 per cent elsewhere.
A new poll by the Building Societies Association reveals the extent to which Britain’s savers could be missing out on better returns.
Savers can easily remedy the error though by checking the best deals in This is Money’s independent best buy savings rates tables and moving their money.
Currently, the best easy access rate pays 5.05 per cent from Paragon Bank, while NS&I has the top one-year fixed rate at 6.2 per cent.
Many current accounts do not pay any interest on the balance, although banks and building societies have generally been improving their offerings for savers recently
The poll also found that a third of UK savers admitted to never comparing the rate on their savings accounts to what rivals offer.
Meanwhile, 30 per cent of savers said they never even check what rates are with their own bank or building society and nine per cent have not reviewed their accounts for a year or more.
Those keeping their savings in their main bank account are likely to be making a blunder that could cost them dear, particularly as rates have risen substantially on easy access accounts. In contrast, many current accounts do not pay any interest.
Some bank accounts do pay interest on balances, but this is often limited to certain amounts and can involve a variety of catches. This is Money’s regularly updated round-up of the best bank accounts details those that pay interest and have other perks.
One in seven (15 per cent) adults have no savings at all, according to the survey, released to mark UK Savings Week 2023.
Of those who do have savings, the average amount set aside is £21,840.
More than half (52 per cent) of people with money saved said they have less than £12,000.
Robin Fieth, chief executive of the BSA, said: ‘As savings rates have been increasing over recent months, shopping around can now make a sizeable difference to the returns available.’
A new consumer duty was recently introduced by the Financial Conduct Authority (FCA), requiring financial firms to put customers at the heart of what they do, including when designing their products and dealing with consumers.
In July, the regulator set out a 14-point action plan to make sure banks and building societies are passing on interest rate rises appropriately to savers.
The FCA wants to make sure savings providers are passing on rate increases and that they are communicating with customers much more effectively and offering them better deals.
Opinium carried out two surveys for the BSA, each involving 2,000 people across the UK, in June.