Britain's savers lose £3.2bn of interest

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Our savings shall not be moved

Britons are missing out on billions of pounds in interest on money put by for a "rainy day" because of the poor rates offered by many banks and building societies.

Research from Tesco Personal Finance, available exclusively to the Independent on Sunday, reveals that some £3.2bn a year is lost in interest on the money the nation puts by for an emergency.

Britons have £144bn saved up in case they lose their jobs or need to fix the roof. Some two thirds of this – £91.2bn – is held in instant access savings accounts, which pay notoriously low rates.

"By not shopping around on the high street, savers are losing up to £186 a year per household in gross interest," says David Anderson, head of savings at Tesco Personal Finance.

High-street instant access savings accounts pay, on average, 0.98 per cent interest. But the five accounts with the highest rates of interest pay an average of 4.37 per cent gross, more than quadrupling savers' returns.

Even better returns on no-notice accounts can be found on the internet. Halifax's Web Saver pays 5.55 per cent interest on balances of £1, and Intelligent Finance pays 5.50 per cent.

On average, a household saves £5,308 in emergency cash. But there are big differences between age groups, with older, retired people saving much more than newly married couples.

Those living in the South-east, where the average household saves £11,320 for a rainy day, miss out on an estimated £695m per year in lost interest, or £288 per household per annum. In the cannier North-east, where they save an average £5,330, they lose £62m, or £97 per household per year.