Many savers are potentially missing out on significant interest earnings by remaining loyal to their current providers. Almost three in 10 Which? members surveyed reported not switching accounts in the past five years, a period during which average instant-access savings rates have increased 15-fold since June 2021.
Interest rates across various savings products are currently on the rise. Instant-access savings rates saw their largest monthly increase since October 2023, reaching 2.53% on 1 August, the highest level in nearly a year. Average one-year fixed savings rates also climbed to 4.23% at the start of August, their best since November 2024, while longer-term fixed rates reached 4.25%, the strongest in over two years.
The choice of savings deals is also at record levels, with Moneyfacts data showing 2,617 savings accounts available to open in August, excluding Isas. This marks the sixth consecutive month of record numbers and is the highest since Moneyfacts began its records in 2007.
Research from Paragon Bank indicates that £338 billion is held in over 51 million savings accounts earning 1.5% interest or less. Reasons for not switching include a preference for known brands and a lack of awareness that interest rates on existing accounts may have fallen.