This article is for general guidance only and is not financial or professional advice. Any links are for your own information, and do not constitute any form of recommendation by Saga. You should not solely rely on this information to make any decisions, and consider seeking independent professional advice. All figures and information in this article are correct at the time of publishing, but laws, entitlements, tax treatments and allowances may change in the future.
Hands up if you opened a savings account some time ago and, since then, have just left it alone to accrue interest?
Your decision to save was noble and taking this approach might have felt like the easiest and least stressful thing to do. But it’s also possible you’ve missed out on an extra boost to your wealth, especially if your cash is languishing in an under-performing account.
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Alex Edmans, Product Director at Saga Money, says: “If your savings are languishing in an account with a low interest rate, you could be missing out on hundreds of pounds. For example, if you have £10,000 in savings earning 2% instead of, say 4%, this equates to £200 a year of interest.
“While it might feel like a hassle to look at your finances, the possible monetary gains are well worth taking some time to consider your options,” he adds.
Kim Uzzell, a financial wellbeing and behavioural finance specialist, says: “Quite simply, leaving money where it is costs people a fortune. UK savers lost an estimated £17.6 billion in real terms in 2025 alone once the erosive effect of inflation was taken into account.
“When you’re over 50, typically the stakes get higher. You’re closer to drawing on that money, not just building it. That means your savings need to be working harder and smarter.
“It’s not about obsessing over your situation daily. But a regular check-in is the difference between being intentional with your money and just hoping it will be fine.”
Sarah Coles, head of personal finance at AJ Bell, told us: “While we’re working, we should be building enough savings to cover three to six months of essential spending, in case of emergencies. When we’ve retired, this rises to one to three years to cover the fact you might be on a lower fixed income or drawing from your pension.”
Coles adds: “Higher oil prices [imposed by the Middle East conflict] are expected to feed inflation. When inflation rises, the market assumes that interest rates will have to rise too, as central banks try to keep a lid on rising prices.
“When the market thinks rates will rise, it pushes up bond yields, which is one of the things banks factor in to set savings rates.
“As a result, deals have been nudging up. It means it’s worth checking your rate is competitive. If you’re in the market for a fixed-rate deal, it’s also a good time to shop around.”
Vix Leyton, a consumer expert at Think Money, says: “The cost-of-living crisis was already putting pressure on household finances long before the latest global conflicts pushed inflation higher.
“Many people were already juggling rising energy bills, food costs, and housing expenses. International instability has added another layer of strain by further driving up fuel and supply costs.”
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With the variety of products available, it makes sense to be clued up on your options. As you’ll need your savings for different reasons, from short-term emergencies to providing long-term stability during retirement, there will be products that are suited to these different needs.
Kim Uzell says: “It's less about having it in one perfect account and more about placing your money in places where it can do the right job.”
Uzell adds that most people over the age of 50 can benefit from splitting their savings into three categories:
“And don't forget Premium Bonds,” Uzell points out. “There are no guarantees of a win, but prizes are paid out tax-free!”
Rachel Edwards, a financial planner at Thrive Together, says: “Keeping an eye on comparison tools and established financial websites and online aggregators can help you stay informed about current rates and options, rather than relying on products you may have opened many years ago.”
When checking around for the best rates and considering where to re-locate existing savings that aren’t working hard enough, it’s worth bearing in mind that a big rule change will affect tax-free ISAs in less than a year’s time.
Vanessa Fuller, a tax specialist at Premier Tax Solutions, explains: “Currently, the ISA limit is set at £20,000 for the 2026/27 tax year. But the limit for adding cash into an ISA is set to fall to just £12,000 from April 2027 for those aged 64 and under.
“There will still be a £20,000 limit for ISAs, but this will be split between a maximum £12,000 in a cash ISA and £8,000 in a stocks & shares ISA.”
Note that for those aged over 64, the £20,000 cash ISA allowance will remain.
Another change that could affect your finances is the income tax thresholds, which have remained unchanged from the last budget. Coles explains: “Frozen income tax thresholds have meant that pay rises enjoyed by those in work and state pension increases have pushed more people into paying tax, or paying it at higher rates.
“When this happens, it has implications for your savings. Basic rate taxpayers have a personal savings allowance of £1,000, and higher rate taxpayers have just £500. It means crossing a threshold can push you into paying tax on your savings – and at a higher rate too.”
Another reason why it pays to keep a close eye on your savings pot.
Saga Money’s Alex Edmans says: “While expectations had been for further interest rate cuts this year, rising inflation triggered by the Middle East conflict means that it's now more widely thought that rates will be held, or even increased, if inflation remains stubbornly high.
“That's likely to mean higher mortgage rates, adding to the cost pressures on borrowers coming to the end of cheaper fixed-rate mortgages. But it also means the savings market is likely to stay competitive. So now is a good time to make sure your money is working hard for you."
Camilla Esmund, senior manager at Interactive Investor, agrees that uncertainty is likely to prevail. “You can’t control the markets, but you can take control of your own finances. You don’t need to overhaul everything. But taking small, regular steps such as reviewing where your money is held, if it is working hard enough for you, checking fees, and making the most of tax wrappers, can help you stay in control and feel more confident about the future.”
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