Nearly a quarter of Brits are routinely leaving money in their current accounts at the end of each month, opting not to transfer it into a savings account, a new survey reveals.
This practice risks the real value of their cash being eroded by inflation, as most current accounts offer negligible or no interest.
Alarmingly, one in six of these individuals holds over £5,000 in their everyday accounts.
Men were found to be particularly prone to keeping substantial sums idle, according to the research commissioned by banking provider Chase.
Shaun Port, managing director for daily banking and savings at Chase, said: “Every pound you save should be working as hard as possible for you.
“Moving your money into a higher paying interest account is a simple step that can make a real difference – helping your savings grow faster and bringing your goals within reach.
“We know consumers feel proud and motivated when they see their money moving in a positive way.
“Compounding interest is a powerful tool that allows your savings to grow faster over time. The main advantage is that you earn interest not only on your original deposit but also on the interest that accumulates, creating a snowball effect.
“This means your money works harder for you, and even small amounts can grow significantly if left untouched. When you create a positive habit, consistency follows.”
Some 3,000 people across the UK were surveyed by Opinium in October.
The news comes as Nationwide unveiled new ISA products and increased rates on some existing offerings, intensifying competition in the savings market ahead of the new tax year in April.
Among the new additions are a one-year single access Isa and a one-year single access saver, both featuring a variable interest rate of 4.00% AER (annual equivalent rate).
Savers opting for these products should note the variable nature of the rate, which can fluctuate.
A key condition stipulates that only one withdrawal is permitted over the 12-month term; exceeding this limit will see the rate significantly drop to 1.05% AER for the remainder of the period.
Nationwide also confirmed on Friday that it has boosted rates across its fixed-rate cash Isas. This includes a five-year fixed rate now standing at 4.25%, an uplift from its previous offering of 4.00%.
How hybrid roles and flexible working are widening women’s wealth gaps
Are interest rates set to go up? How the Middle East conflict could hit your finances
Oil, gas and stocks fluctuate over Iran – what it means for your money and pension
One in seven high street businesses ‘have gone cashless in the past year’
Major UK bank offers new cash Isa deals with over 4% interest
Women make better investors than men. So why don’t more of them do it?
.jpg?w=600)
