57% save with a high street bank
40% of high street savers have held their account for over 15 years
New research* from Saga Secure Savings reveals that the loyalty savers invest in their local high street bank can cost them dear. 57% said that they hold their main savings account in the high street and despite incredibly low interest rates, 40% of these savers have held their account for more than 15 years.
Although 71% of all savers said it was important that their savings were earning the best rate of interest, surprisingly 74% of high street bank savers admitted to not knowing what their savings were earning at all. This could be a costly mistake.
The table below indicates some comparable rates based on an investment of £1,000.
Account Gross Annual Interest Rate
Saga Secure Savings 4.25%
HSBC Instant Access Savings 1.49%
Abbey Flexible Saver 3.55%
Lloyds TSB Guaranteed Tracker 2.40%
Natwest Savings Direct 3.65%
The survey also tried to uncover the reasons preventing savers from switching accounts, 60% said that they wouldn't switch as their provider was located conveniently to them and 43% said they kept all of their accounts with the same provider so would be unlikely to take their money elsewhere.
Andrew Goodsell, Chief Executive of Saga commented: "It is surprising that people hold their savings accounts for such a long time without knowing the rate of interest they are earning. It is important to check that your account offers consistently competitive rates of interest. "
The survey also indicates that the situation is not going to alter in the short term as 66% of savers take advice from their local branch about where to invest their money. Rather worryingly, only 27% of people use an independent financial adviser to help make this decision compared to 40% who take advice from family.
Notes to editors:
*Research carried out over the telephone on behalf of Saga by BMRB between 10th - 12th June 2005 amongst a sample of 2035 adults aged 17 in GB