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£13bn lost to paltry savings rates – are banks to blame?

I’m a lazy saver. I have little motivation for moving my money – and there’s not much to move. But when our latest research shows we’re missing out on £13 billon in savings each year I decided I’d like my slice of the pie.

Now, I’m lazy with my savings in a number of ways. I don’t physically shop around, I wouldn’t keep an eye on my savings rate if my bank didn’t write to me and I wouldn’t make proactive payments if it wasn’t for simple online banking.

I’m a low-rate savings account dream.

Savings rates on statements

When we ran the Great British Savings Scandal campaign in 2010, we demanded banks provide savers with information on their savings rate. That includes providers sending each customer an annual notice of interest rates.

Luckily for me, that’s exactly what my bank did, alerting me to the fact that my bonus period was due to come to an end and offered me some alternatives.

On a previous Conversation, Bill told us how he did the hard work himself:

‘It was only because this silver surfer was becoming a little au fait with computing since I retired that I found [my saving provider] was doing an e-ISA for 2.75% as well. So it does pay to shop around, even within the same company.’

It was down to my Which? Money colleagues to come to my rescue and find me a good deal.

I didn’t need any insider knowledge on the issue, I just put in the details on my existing savings account and the savings booster tool did the magic to work out what options would earn me more interest. I then used our Best Rate savings tables to choose an account, and job done.

Lethargy for switching

Now, I had a few prompts for doing this – shocking headlines about what I was missing out on and warning emails from my current provider. But commenter Roger B is worried that we’re doing too much of the work:

‘Why do I have to waste my time – and the bank’s time – opening accounts and closing them twelve months later? If everybody did that then surely the banks would stop this ridiculous merry-go-round.’

We’ve had a range of Conversations on similar issues – including why some individuals are reluctant to make the move (Chris McBride, I hope you’ve switched bank accounts by now!).

Do you think your bank provides you with enough information on your best deal? And will you be joining me in making your move – after all, it’s World Consumer Rights Day.

Comments
Profile photo of colin c
Member

As the best rates seem to be with internet based accounts, one thing Which might investigate is how easy the various banks and building societies websites are to use to set up a new savings account.

We set up a couple of new savings accounts a year or so ago and it was so frustrating, took several hours, even though we were already an accountholder with one of the banks (Nationwide). Now our annual bonus rate has ended it is time to switch to something else but the prospect of doing it all again puts me off – my wife really wants to go back to a branch based account, even if the rate is lower.

Member
Harry says:
16 March 2012

Even though my banks provide interest rate information, they seem to do so in a manner intended to deliberately make it hard to find. I have to know *exactly* what my account is called (there are many accounts with very similar names, and they change then names regularly) and when I opened it, then I have to look it up in an external document — which may in turn try to further confuse by mention of bonuses (which it tries to imply are additional to the headline rate, but probably aren’t) and miniscule footnotes that say no interest is paid at all when the balance reaches £5000.

The requirement should be that whenever I display either the summary list of my accounts with the bank, there is are three columns which display

a) the exact amount that is currently being paid
b) the amount that will continue to be paid when the introductory period expires
c) the absolute minimum that will be paid if I have too little or too much in my account.