Are your savings earning enough? £233 billion stuck in bank accounts with zero-interest

New research by fund managers has shown that up to £233 billion of savings are currently held in zero-interest bank accounts.

In previous years, the historically low-interest rates brought on by the Bank of England’s decision to keep the base rate low have meant that many savers have had little option but to put their money into accounts that offered low or no interest – including many current accounts.

However, as the Bank of England has increased the base rate and the interest rates offered by banks have risen, too few savers have moved their money to higher-earning accounts.

This new analysis by Bowmore Asset Management shows that the amount left in zero-interest accounts has doubled since 2013 – when only £109 billion was held in similar savings.

The Bank of England is expected to continue increasing interest rates while inflation remains at higher than anticipated levels, so savers must act to put their money into accounts where they can earn even minimal interest.

There are an increasing number of current accounts that offer interest, as well as generous sign-on bonuses, and even more dedicated ISAs and fixed-rate accounts offering even higher returns.

By deciding not to move money into interest-earning accounts, many savers are devaluing their savings by failing to keep up with higher levels of inflation.

If you are concerned that your money is being eaten up by inflation in a low or zero-interest account, seek professional independent financial advice today.

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Posted in IFA News.