'Savers have heads in sand when it comes to rates': We're more likely to switch energy or broadband than find better savings
Only one in ten savers have thought about switching to a different savings account even if they are earning a paltry rate or don’t trust their current provider, a survey claims today.
People are more likely to search out better deals when it comes to switching other services, with 41 per cent saying they would hunt for better energy deals, 34 per cent insurance and 25 per cent broadband.
The research from lend-to-save firm Zopa found one fifth believe it was too much hassle to switch savings account, even though 46 per cent of savers said they didn’t trust their current savings provider.
Head in the sand: A survey has found savers are becoming 'disinterested' in savings rates
Recently, Bank of England governor Mark Carney said that interest rates could rise sooner than expected while changes to the Funding for Lending scheme could also spell a better year for rates in 2014 according to experts.
However, the research found more than half of savers don’t know the current interest rate on their account, evidence that the low rate environment has created a legion of people uninterested in their savings.
This year has been a torrid one for savers. Cash Isa and easy-access rates have plummeted to some of the lowest on record, while only long-term fixed-rates have seen any upward movement.
The findings also revealed 43 per cent of those with savings only check their accounts ‘once or twice a year.’
Giles Andrews, co-founder of Zopa, said: ‘Many consumers have their heads in the sand when it comes to their savings rates.
‘Savers need to look at the full savings landscape, including bank deals, but must beware of the short term incentives as many long term rates are significantly below inflation, with the default savings rate moving to 0.1 per cent for many consumers.’
The Zopa survey was of more than 4,000 savers. The peer-to-peer lender lends savers' cash directly to borrowers. It currently offering rates of 4.2 per cent for three year fixes and 4.6 per cent on five year fixes.
Zopa is supervised by the Office of Fair Trading but is not a bank and so savings are not part of the Financial Services Compensation Scheme that guarantees savers against losses if the provider goes bust. Traditional savings accounts have this protection up to a limit of £85,000.
Zopa does have a 'Safeguard fund' which is maintained to cover savers for any loss of capital or interest when a borrower is unable to repay. You can find out more here.
WHAT ARE THE BEST SAVINGS RATES?
The findings of this survey are
worrying, especially as many savings accounts come with bonus rates
attached that expire after a short period of time. This could leave you
floundering on a rate as low as 0.1 per cent.
Rates have plummeted this year while
cash Isa season was a complete non-event - This is Money revealed
earlier in the week that best buy rates are currently among the lowest
in history.
It’s quite easy to see how savers are losing – or have already lost - interest and faith in traditional savings accounts.
The best rate you can get on a cash Isa
is 1.8 per cent from the Post Office, while the top rate fix is five
years from Virgin Money.
For easy-access accounts, Coventry Building Society has a bonus free 1.6 per cent rate available.
FirstSave and National Counties Building Society have best buy two year fixed accounts at 2.35 per cent, while Shawbrook has the best buy three and five year fixes at 2.65 and 3.2 per cent respectively.
Most watched Money videos
- The new Aston Martin DBS Superleggera makes its debut
- Take a look inside the classic Ford Sierra Cosworth RS500 car
- Investing Show: How to find the best companies to invest in
- Martin Lewis breaks down for couples how the marriage tax break works
- Pension guide specialists help people to understand their options
- 'No one's expecting house prices to drop dramatically again'
- CEO Dave Lewis discusses Tesco's interim results for 2014-15
- Land Rover creates one-of-a-kind defender for milestone
- How the summer Budget affects tax, pensions and wages
- Not so Innocent now. Superhero smoothies TV advert
- Paul Kavanagh's market update on the FTSE 100, Shell and US earnings
- The Pru (Prudential) literally put an elephant in the room in ad.
- Clash of the titans at warring Stobart: City bigwig joins...
- VAT calculator
- Lee Dixon: Me and my money
- Tenants in common
- Is buying a title for £195 ever worth it? I'm Lord Toby -...
- Am I allowed to give my children £10,000 in cash for...
- 'I flew to Hungary to have my teeth fixed.'
- Have I found a 2p coin worth £700
- Can you change a name on a plane ticket?
- The 10 devious new scams you've never heard of (and how...
- Find out how much different mortgage lenders will let you...
- Best paid UK jobs revealed: Compare your pay to the...
- 'I've been a loyal HSBC customer for 50 years, but it...
- Could you ditch bricks and mortar and buy a canal boat?...
- Owners rush to cash in on properties' rising values, but...
- What really happens when you hit the Premium Bonds...
- Hosepipe ban: Some sneaky but legal ways to keep your...
- My wife never paid any National Insurance contributions,...