Half of people have not switched savings accounts or cash ISA in the past five years, with 40% having never switched, Hargreaves Lansdown has revealed.
The firm further found that two thirds of people are not planning to switch in future, and almost half of savers are blind when it comes to what interest rate they are receiving.
Hargreaves Lansdown personal finance analyst Sarah Coles said: “Savers are distressingly sticky: half of people haven’t switched a savings account in the past five years, and 66% aren’t planning to switch in the future. People don’t realise how badly their savings are doing, how much more they could make elsewhere, or how easy it is to switch.
“FCA research has shown that on average, cash stuck in old savings accounts earns far less interest than money that’s been switched more recently: the longer you leave the money languishing, the lower the average rate is.”
Under a third of people have switched accounts in the last 12 months, while half have not switched for five years or longer. Approximately 40% of people have never switched a savings account or cash ISA, with the “squeezed middle” aged (35-54) the least likely to find the time to make a switch.
Just under one in ten (9%) people are planning to switch savings account in the next three months, while fewer than one in three are planning to switch in the next 12 months (29%), despite the fact interest rates have been increased. Two thirds of people claimed they are not planning to switch savings account whatsoever.
The firm found that older people are less likely to switch when compared to younger savers. Just 26% of those aged 55 and over are planning to switch in the next year, while 32% of those aged between 18 and 34 are.
Furthermore, 46% of people are unaware of the interest rate they are currently getting, with a higher percentage of women being blind as to what rate they are receiving on their savings when compared to men, at 61% and 47% respectively.
While older savers are less likely to switch, Hargreaves Lansdown highlighted that they are most likely to know what interest rate they are getting, with 60% of them being aware.
“Almost half of savers don’t realise how little interest they’re getting from their older accounts, and even if they do know the rate they’re on, they may not know that they could do far better elsewhere. Moving from an uncompetitive easy access account to a competitive rate can easily triple your return, and moving to an appropriate fixed rate could multiply your returns by five,” Coles added.
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