Millions of savers across Britain could be losing out without even realising it.
Experts have sounded the alarm, warning that an unseen change to savings accounts could be quietly draining hundreds of pounds from people's pockets every year.
As interest rates fall, millions are unknowingly earning far less on their savings than they should — and the cost is mounting fast.
According to new research from Hargreaves Lansdown, more than a quarter of savers are "completely in the dark" about what rate they are currently earning, which could potentially be costing them over £1,000.
Sarah Coles, head of personal finance at Hargreaves Lansdown, warned that the consequences could be serious.
She said: "Given how rates have been falling, and how much further they’re expected to go, they could end up paying a horrible price for it.
"The longer you leave money in an account, the more likely the rate is to drop, so there’s every chance that if you’re not checking your rate and switching, you could be making far less than you think on your savings.
"This is particularly the case at a time of falling rates. Banks are cutting rates right now, so if you haven’t checked with your provider, or opened letters or emails from them, there’s every chance your easy access rate has dropped."
Thousands of savers 'completely in the dark' over account change costing you £1,048 a year
GETTYColes explained that banks tend to quietly reduce savings rates over time, particularly on easy-access accounts.
If savers are not regularly checking and switching, they could be earning far less than they realise.
She said: "When rates are falling, savers may think there’s no point in keeping on top of their savings because they’re lower everywhere, but with several accounts still offering 4.75 per cent or more, switching could make a serious difference."
The figures highlight just how much money could be slipping through the cracks. A saver with £30,000 left languishing in an account paying just 1.35 per cent could earn £408 in a year.
However, by switching to an account offering 4.75 per cent, they could make £1,456 — a difference of £1,048.
Savers would be wise to review their existing accounts and switch if they are getting a raw dealGETTYThe problem is especially severe for groups who typically have smaller savings pots.
Women, renters, and basic rate taxpayers are among the most likely not to know the interest they are receiving, the research found.
Around 34 per cent of women were unaware of their rate, compared with 23 per cent of men. Similarly, 38 per cent of renters were unaware, compared to 25 per cent of homeowners.
Younger savers, however, are slightly more engaged. Those aged 18 to 34 were more likely to know their rate than those in the 35 to 54 age bracket, a group often stretched by busy working and family lives.
According to Coles, the "hassle factor" plays a role here, with mid-life savers struggling to find time to manage their accounts.
For savers put off by the idea of managing multiple accounts, using a cash savings platform could be a solution
GETTYThere’s also a hidden tax risk for those with larger savings balances. Coles pointed out that basic rate taxpayers have a £1,000 personal savings allowance, while higher rate taxpayers have a £500 limit.
Anyone earning more interest than these limits could face a tax bill — often long after the interest was received.
"If this is a concern, it’s worth considering a cash ISA, where all your interest is tax-free," said Coles.
For savers put off by the idea of managing multiple accounts, using a cash savings platform could be a solution.
These platforms offer competitive rates and make it easier to switch and monitor savings in one place.
With rates changing quickly and competition still available, experts say now is the time for savers to check their accounts, compare deals, and make sure their money is working harder.
