Research claims that savers are missing out by keeping their money in accounts paying poor interest rates.
Yesterday Which? magazine published research that claims that savers could gain, on average, an extra £322 in interest payments per year if they moved their savings to accounts offering the best rates. This is largely due to the fact that ‘almost half of the 1,200-plus savings accounts available in the UK pay 0.5% interest or less and one in four pays 0.1% or less - just £1 a year for every £1,000 saved’.
Is this a bit of sensationalist journalism?
Whenever I see news stories that are supported by ‘research’ I take the findings with a pinch of salt. Usually their main aim is to promote the ‘researcher’ rather than shed any real insight. In the case of Which? the aim of this story is to promote their best savings interest rate tables and search tools which they earn money from. To directly quote their site ‘’wherever we display a "MORE INFO" button in the tables, that company pays us a small fee each time someone clicks on the button. These payments do not influence whether a product is in the table, where it appears, or whether it continues to do so. Our Best Rates tables are compiled by our independent researchers. All revenue raised from these tables is reinvested in our research and campaigning work on behalf of all UK consumers.’’ So they want you to read the story, then use their tables and click on ‘MORE INFO’.
There’s noting wrong with this at all as they are providing a good service which can save you time and earn you more money. But my point is that the £12bn figure in the headline is purposely eye-catching.
I’m not sure how realistic the £12bn really is. It would not be possible for everyone to switch to the best rate deal as the rate would be eventually pulled by the institution offering it to prevent over-exposure. So it’s unlikely that everyone would be able to get this extra £322 that is apparently just waiting to be claimed.
But in any event there is an important message here
Banks don’t want to pay you any more interest than they have to. So they won’t. Not only that but they will often slash your interest rate on your existing savings accounts without telling you.
So make sure your savings are earning you as much interest as they can. The power of the internet means that in just a few minutes you can not only find out the best savings account for your money but also start the ball rolling in moving your funds to their new home.
And why not use Which?’s savings booster tool to help you. It’s free after all.