A leading consumer group has found that millions of savers in the UK could be missing out on the best interest rates by failing to switch their accounts when introductory bonuses come to an end.
Consumer Focus found that two thirds of ISA savers that had an introductory interest rate bonus did not switch accounts when it ended whilst a quarter had no idea whether there was an initial interest rate bonus at all.
Switch ISAs to get a better rate
The research also discovered that a third of all ISA savers had held their account for more than five
years, suggesting that consumers could get a more competitive interest rate by transferring their
savings to another provider.
The Independent highlighted several cash ISAs which currently available that pay returns of more
than 3 per cent. The newspaper reports that ‘Santander leading the field with a rate of 3.5 per cent
for existing customers, but the average rate on one of the accounts is just 0.43 per cent.’
Banks ‘cashing in on customer inertia’
Oliver Morgans, financial services expert at Consumer Focus, said: “Around one in three of us has a
cash ISA so millions of people are likely to be losing money by not switching when their bonus rate
ends.
“Unfortunately it seems that banks use higher interest rates to lure customers in and then aim to
cash in on their customer’s inertia.
“Sadly ISA customers have to watch banks like a hawk if they are to get the best deals. With
consumers getting a paltry return as low as 0.1 per cent on some accounts, our advice to savers is to
check your rate and if you are not happy, vote with your feet and switch to an ISA that pays more.”
