Millions of Britons missing out on free savings boost sparking call to check savings accounts

With inflation having fallen to 3.4 per cent, there are a variety of savings accounts offering inflation-beating returns.

Savers are warned that keeping their cash in low paying interest accounts could be costing them hundreds each year.

Analysis from Yorkshire Building Society and CACI found that almost half (45 per cent) of Britons stated if they were given £400 they didn’t need to give back they would save it.

However, those leaving funds languishing in low interest accounts could be missing out on that amount.

The analysis highlighted that almost £400billion is being held in current and savings accounts earning one per cent interest or less, meaning millions are losing out on additional income.

Millions of savers are warned they are potentially missing out on hundreds of pounds of extra income a year because their cash ISA savings are in accounts paying 1.50 per cent or less.

The current best one year fixed rate ISA is from Zopa offering five per cent, and the top easy access ISA is from Plum offering 5.17 per cent, according to Moneyfactscompare.

Those who wants to take action can opt for Yorkshire Building Society’s Double Access ISA.

This account beats inflation and currently pays 4.70 per cent and can earn over £400 in interest a year.

Chris Irwin, director of savings at Yorkshire Building Society, said: “It’s surprising to see such a large amount sitting in low paying ISA accounts after a period of significant increases to savings interest in the last two years.

“This data follows on from our analysis earlier in the year calling for consumers to take time to review their finances.

“The start of a new financial year gives the perfect opportunity to review finances and make the switch from low paying accounts.

“Although we’ve seen the Bank rate increase this analysis clearly shows that there are still many accounts which continue to pay low rates despite those increases. Its important savers take action and think about how they can make their hard-earned cash go as far as possible.

“Last year, our savings rates paid an average of 1.01 per cent more than the market average rate so we are encouraging customers to review their savings and get the information they need to make sure they aren’t missing out.”

Moneyfacts data reveals there are now 1,365 accounts that beat inflation.

This was not the case a year ago when inflation stood at 10.4 per cent in March 2023, and no savings interest rates beat inflation.

So, experts have urged Britons to review their account and switch if they can get a higher interest rate.

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Rachel Springall, finance expert at Moneyfacts, said: “This research emphasises why consumers need to regularly check the rate they earn against the market and not presume they are getting a decent return.

“It is wise to make a diary note to proactively review and switch existing ISA pots to keep their tax-free wrapper and chase better returns. Leaving Cash ISAs unchecked or becoming apathetic can be costly, as savers may miss out on a better rate without realising it.”

YBS is not the only provider offering high rates on a cash ISA.

Plum’s cash ISA is currently at the top of the cash ISA table, offering 5.17 per cent AER.

The rate drops to 4.29 per cent after a year, if someone makes more than three withdrawals in a year, the rate will drop to three per cent. They only get 4.29 per cent if they transfer in an existing ISA.

Their account has surpassed Moneybox’s 5.16 per cent AER cash ISA, which has remained top for over a month.