- Experts have issued a warning to savers as millions are earning much less than they could be.
- Around 62 million adults in the UK are earning 2.5% or less on their savings.
- This means they are losing real value as their interest rate fails to keep pace with rising prices.
- An analysis revealed that a staggering £502 billion is currently held in adult savings accounts earning 2.5% and under.
- The average account earning less than 2.5% has a balance of £8,099.
- Savings accounts holding more than £10,000 but earning less than 2.5% interest pay just 1.43%.
- Across all accounts with balances above £10,000, the average interest rate is still only 2.91%.
- Derek Sprawling, Head of Money at Spring, stated that today's figures are a timely reminder of a growing challenge for savers.
- More than 10 million savings accounts with balances over £10,000 are earning less than the rate of inflation.
- The total balance of adult savings held in accounts earning 2.5% and under stands at £502 billion, according to new analysis.
- With the CPI rate of inflation at 2.6%, accounts earning 2.5% and under are losing value in real terms.
- On average, savings accounts earning less than 2.5% interest pay just 1.43%.
- One in three people have £5,000 sitting in their current account, while the average current account balance is £2,067.
Experts warn that 62 million UK savers are at risk of losing real value as £502 billion is held in low-interest accounts earning 2.5% or less, which fails to keep pace with inflation currently at 2.6%.123456101112
The analysis by savings app Spring highlights that the average account balance in these low-interest accounts is £8,099.
More than 10 million savings accounts with balances over £10,000 are earning less than the rate of inflation, with an average return of just 1.43%.79
Derek Sprawling, Head of Money at Spring, stated, “Today’s figures are a timely reminder of a growing challenge for savers.” He emphasized that many savers are seeing the real value of their hard-earned savings eroded by rising prices.
Additionally, £155.8 billion is held in 735,000 accounts with balances over £100,000, all earning 2.5% and under.
The report also notes that one in three people have £5,000 sitting in their current account, with the average current account balance at £2,067, often yielding no interest at all.13
“A competitive interest rate is important, but it should not be the only consideration,” Sprawling added, urging savers to consider account accessibility for unexpected expenses.
The findings serve as a crucial reminder for savers to reassess their financial strategies in light of inflationary pressures.
“The average low-rate account pays 1.43%, far below 2.6% inflation. Derek Sprawling said over 10 million accounts above £10,000 earn less than inflation, with £155.8 billion in 735,000 high-balance accounts also affected, and one in three people keep £5,000 in zero-interest current accounts.”
Daily Express
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