Over a quarter of a million adult cash savings accounts containing balances of £10,000 or over are earning 1% or less, despite the growth in savings rates over the past two years.

Analysis of CACI data by Paragon Bank revealed that this is costing savers over £250m in lost interest.

Paragon’s findings showed that 261,000 interest bearing adult accounts containing £10,000 or over were earning 1% or less in July 2024. Over 8,500 accounts boasting balances of £100,000 or above were earning that figure, rising to 42,700 accounts containing £50,000 or above.

Collectively, figures have indicated these savers are missing out on £258m in savings interest each year. By value, CACI data shows that £8.6bn is held in the quarter of a million accounts, creating an average balance of £32,811. Based on 1% interest, the average account could expect to earn £328.11 in interest over a year, or collectively £85.9m.

If that balance was transferred to an account paying 4%, the interest payment would increase to £1,312.42 over the year, or £343.8m overall annually.

Across the overall adult cash savings market, 2.3 million interest bearing savings accounts are earning 1% or below, equating to £10.1bn.

“Given the range of providers paying generous rates of interest available across the market, it’s remarkable there are still savers with large balances still accepting returns of 1% or below,” said Paragon’s managing director of savings, Derek Sprawling.

“These savers are seeing their money shrink in real terms as their return remains below inflation and, collectively, are missing out on over £250m in interest.

“The savings switch message can often get ignored by those with smaller balances, which can be understandable given the relatively small increase in returns, but those with sizeable deposits have a real and genuine incentive to move their money.”

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