Many people are unknowingly losing money from their savings because they don’t ever touch their accounts, one money expert explains how to stop the leak
A huge 31 million Brits are unwittingly letting their hard-earned cash dwindle in ‘zombie’ savings accounts, which could be costing the average saver a hefty £560 due to subpar interest rates when compared to more lucrative options. Personal finance guru Aaron Peake is raising the alarm on the perils of leaving savings in these dormant accounts, which often fail to keep pace with inflation due to their low interest rates, leaving you paying the price without even realising.
Aaron said: “Far too many people keep their savings tied up with their current bank without questioning the poor rates. These linked accounts often offer low interest, withdrawal limits, or tiered rates that punish you if you move money around.
“If your savings rate is below inflation, which is currently 3.4%, your money is losing value. It pays to shop around and scour price comparison websites.
“You don’t have to lock your money away or sacrifice access to get better returns. Many accounts offer competitive rates with no strings attached.
“With the Bank of England expected to cut its base rate soon, savers should act quickly. Lower base rates usually mean lower savings rates.”
In the battle against inflation, interest is the only way for cash savings to maintain their purchasing power. However, with CredAbility data revealing a whopping £186 billion sitting in UK accounts earning just 1.5% interest, it’s clear that many are missing out on maximising their savings’ potential.
In the 12 months leading up to May 2025, the inflation rate stood at 3.4%. Given that the average saver has approximately £16,000 in their savings, this could signify a significant value being lost annually.
For instance, if you have £10,000 in an easy-access account yielding 1.5% interest. This would generate £240 in interest each year. However, if you were to use a top-rated easy-access account with a 5% interest rate, you could have earned £800 instead.
This equates to an additional £560 per year simply by choosing the right account. Essentially, sticking passively with your existing accounts rather than actively seeking out the best deals could be shaving hundreds off your savings.
Different accounts also offer varying ranges of interest rates. Typically, easy-access accounts provide the lowest interest rates as they allow constant access to your funds without penalties.
However, accounts with more restrictions on when you can withdraw your money usually offer higher interest rates. These include fixed-rate accounts, notice accounts, and regular savings accounts and are generally better used for long-term savings goals when you won’t have to access the money for months or years.
Depending on what you’re saving for, other accounts might be a better option and could come with a substantial boost in interest rate. MoneyFacts has outlined the average interest rates currently available across different accounts.
Average interest rates for July 2025:
- Easy access – 2.68%
- Notice account – 3.62%
- Easy access ISA – 2.92%
- Notice ISA – 3.49%
- One-year fixed bond – 4.03%
- Long-term fixed bond – 3.91%
Currently, Aaron’s top accounts offering market-leading interest rates are:
- Principality Building Society’s Six-Month Regular Saver – 7.5%
- Atom Bank’s easy access – 5% with 2.25% bonus for the first year for new customers
- Snoop’s easy access saver – 4.6%
- Plum’s 95-day notice – 4.84%
- Oxbury Bank’s 120-day notice – 4.6%