The Bank of England’s latest figures from December revealed more than £276bn was sat in UK accounts not paying any interest – only slightly below the record of £282bn set the month before.
But this isn’t a new problem.
Over the last decade, the amount of money left behind in accounts not paying interest has more than doubled and is more than 15% of all money held in individual accounts or Cash ISAs in the UK.
The problem is that this money is losing value, being eroded away by inflation.
Inflation rose again in February, hitting 3%, and now estimates are showing it could rise even further.
While unlikely, let’s assume inflation stays at 3% for the full year – for every £100 you had, it would drop in real value to £97 by the end of the year.
This article isn’t personal advice. If you’re not sure an action is right for you, ask for advice.
What’s stopping savers fix the problem?
In our last survey*, 16% said switching accounts would be too much hassle. This rises to 20% of women and 26% of those aged 35-54.
In many cases, it’s the imagined work that comes with switching that puts them off – 11% say they probably should switch but can’t be bothered. This rises to 17% among those aged 18-34.
Meanwhile, 10% say they don’t have time – including 12% of men and 18% of younger people.
Thankfully, shopping around and switching has never been easier with online savings platforms becoming the new norm.
How to get more interest from your savings
Active Savings
An online savings platform, like Active Savings, means you can switch banks to find better rates all in one place, without spending lots of time shopping around yourself. Bear in mind that rates are added and withdrawn at any time.
Active Savings brings some great rates on the market from over 20 banking partners through one easy-to-use online account.
It also offers long and short-term fixed rates, as well as easy-access products.
Remember, fixed rates don’t normally let you take out your savings until the term ends. It’s a good idea to make sure you’ve already built up an emergency savings pot you can get to quickly before fixing other savings.
Looking to shelter your savings from tax too? – consider a Cash ISA
If you’ve got any ISA allowance remaining and want to shelter your savings from tax, a Cash ISA could help.
You don’t pay any UK income tax in a Cash ISA. And with savings interest tax set to rise to more than £10bn this tax year, it could be one good way to cut your tax bill.
Rumours around changes to the Cash ISA in Rachel Reeves’ Spring Statement are swirling, but for now, that’s all they are, rumours. It’s best to focus on what we do know.
The Cash ISA market has risen in popularity in the last few years, but with so much choice, it can be hard to find great rates.
The HL Cash ISA is one way to do this.
As part of the same online savings platform as Active Savings, it brings competitive rates from different banks and building societies into one online account.
The Cash ISA also lets you spread your money across fixed-rate, easy-access, and limited-access products.
Through the same one easy-to-use login, you can switch between banks as much as you like when your terms come to an end.
Just remember, products can be added or withdrawn at any time.
Take advantage of our special offers. See what's available for new and existing HL clients. Terms apply.
*Figures in this article are from a survey of 2,000 people by Opinium for HL in September 2024
This website is issued by Hargreaves Lansdown Asset Management Limited (company number 1896481), which is authorised and regulated by the Financial Conduct Authority with firm reference 115248.
The Active Savings service is provided by Hargreaves Lansdown Savings Limited (company number 8355960). Hargreaves Lansdown Savings Limited is authorised and regulated by the Financial Conduct Authority (firm reference number 915119). Hargreaves Lansdown Savings Limited is authorised by the Financial Conduct Authority under the Electronic Money Regulations 2011 with firm reference 901007 for the issuing of electronic money. Hargreaves Lansdown Asset Management Limited and Hargreaves Lansdown Savings Limited are subsidiaries of Hargreaves Lansdown plc (company number 2122142).