How switching easy-access savings account could give you a £200 boost

Half of savers have never switched bank despite analysis showing they could be more than £200 better off a year if they did.

Nearly four in five – or 76 per cent – of savers claim they would switch for a better rate and yet 49 per cent never have, research by Atom Bank found.

This is at a time when large gaps have opened up between the best and worst rates on the market. 

Don’t settle for a rip-off: Many of the big banks pay less than 1% on standard easy-access rates

The average easy-access rate today is 2.1 per cent, while the best deal available pays 3.82 per cent.

Many Britons will be doing much worse than the average rate, with many of the big banks continuing to pay rock bottom rates on their standard easy-access rates – despite the Bank of England upping the base rate 12 times since December 2021.

Barclays and Santander both pay just 0.7 per cent on their Everyday Saver accounts, Lloyds Bank pays 0.85 per cent on its Everyday Saver, while TSB pays 0.9 per cent on its Easy Saver deal.

Virgin Money’s Everyday Saver pays an insulting 0.25 per cent. Meanwhile Halifax pays 0.9 per cent on the first £10,000 held within its Everyday Saver, and HSBC pays 1 per cent on its Flexible Saver.

Somone with their rainy day savings in Virgin Money’s Everyday Saver account could essentially be earning 15 times more by switching to one of the best easy-access rates on the market.

– Check out the best easy-access savings rates here. 

On £10,000, that’s the difference between earning £25 and £375 over the course of one year.

There will be plenty of Britons who will be doing even worse than these paltry returns. 

This is because a huge amount of cash is stashed in current accounts paying no interest at all.

The financial benefits of being proactive and switching providers to secure better rates is significant. 

Among those who have switched savings providers before, the majority do so only every two-to-five years, according to Atom Bank.

This means they may have missed out on top deals since the Bank of England began increasing the base rate.

Atom’s analysis shows that a saver could in fact earn an additional £227 a year in interest if they were to switch from one of the high street banks’ easy access products to a challenger bank paying a fair rate. 

Last week, This is Money revealed how a saver that switches to a best buy easy-access rate just once a year will earn three times more interest than the average saver over time.

Someone with £10,000 at the start of 2008 who moved their cash at the start of each year to the best easy-access rate, would have accrued £4,461 in interest.

That’s £2,916 more than the average saver during that time, who would have earned just £1,545.

The lack of switching is in part due to the perception that the process of switching is challenging, with almost a quarter saying that they haven’t switched because it is too much hassle. 

However, most  savings providers allow people to set up an account with some taking as little as five or ten minutes to complete.

Our chart shows how a saver on the average easy access savings rate in blue would have massively underperformed those seeking out the best rate once a year in red. Meanwhile, those who took different length fixed rates, in orange, green and yellow did even better.

Mark Mullen, chief executive at Atom Bank says: ‘The big banks are making a fortune by not passing on rate increases to savers. We think savers should be getting paid, not played by their bank. 

‘Let’s not forget, most savers are covered by the FSCS for sums up to £85,000 and have absolutely nothing to gain by remaining loyal to ‘so called safers banks that pay them derisory savings rates. 

‘We need to drive better awareness and competition in order to turn the dial on this issue.

‘The myth remains that switching banks is a time-consuming and difficult process. Savers today have the best rates at their fingertips, and just a few clicks on a decent app can earn them an extra few hundred pounds a year. 

‘The sooner people realise this, the sooner big banks will be forced to change their ways.’