Interest rates: Britons lose out on millions as money lies dormant in 0.1 percent accounts
Interest rates have unfortunately been impacted by the ongoing COVID-19 pandemic and its subsequent fallout. Earlier this year, in March, the Bank of England decided to lower its base rate to 0.1 percent, in an unprecedented move. Many familiar providers later followed suit, impacting millions of savers with their money put away.
Indeed, interest rates from providers have fallen like dominos, leaving low rates for those who wish to have easy access to their money.
Data from CACI, analysed by Paragon, has painted a dire picture for easy access savings as they currently stand.
The total balance held in easy access accounts earning a rate of 0.1 percent or less now stands at £313billion.
This, Paragon stated, means Britons are losing out of millions of pounds of interest.
READ MORE: Bank Account: Britons missing out on £4.5billion through lost accounts
In the nine months to September, it was found an additional £53billion was placed into these accounts, compared to £17billion in the same period last year.
Derek Sprawling, Paragon Savings Director, commented on the matter.
He said: “The value of easy access stock receiving a rate of 0.1 percent has now tipped over 50 percent for the first time this year, with a steep increase in September.
“The timing aligns with a rate reduction announcement made by a government-backed provider.
“This caused significant market disruption, leading to deposits flooding out into the market at an unprecedented rate.
“The data also suggests that many savers have given in to inertia.
“People are likely to be opening accounts linked to their current account for ease of access, but those often pay a lower than average rate of interest.
“In today’s digital world, opening and servicing a non-linked savings account is often easier than people think.
“Moving money from the large high street banks has never been easier, so we would encourage savers to look for the best deal for their money.”
In recent weeks, there has been mounting speculation that negative interest rates could be on the way.
It was thought such a measure could provide a welcome boost to the economy amid the impacts of the ongoing pandemic.
However, governor of the central bank, Andrew Bailey, merely stated the measure was “in the toolbox” with no plans to use it imminently.
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