Nearly half of people ‘have not switched savings accounts in past five years’

Nearly half (49%) of people say they have not switched their savings account in the past five years, a survey has found.

Just over a third (35%) have never switched, according to the research from Hargreaves Lansdown.

Women are less likely to have switched than men, with 40% of women surveyed saying they have never switched, compared with 30% of men.

The most common reasons for not switching were perceptions that rates are too low to bother with, people trusting their existing bank and savers believing it would be too much hassle to switch, the survey of 2,000 people in September found.

Interest rate rises in recent months have led to some providers improving their savings rates.

Sarah Coles, senior personal finance analyst at Hargreaves Lansdown said: “It was easier to see why people didn’t think it was worth the effort of switching in previous years, when rates were so low, but rises in recent months have pushed up the most competitive rates to 2.75%.

“So if you’re earning next to nothing in a miserable high street savings account paying 0.4%, you could make almost seven times the interest by switching to the most competitive easy access rate on the market, or more than 11 times the interest by tying your money up for a year (4.55%).

“And this is only the half of it, because the longer you leave money languishing in an account, the lower the rate tends to drop. It’s one reason why we have £267.8 billion sitting in accounts paying no interest at all.”

Smaller and newer banks may offer more competitive rates and so “we need to consider how much interest we’re losing by choosing not to trust a bank on the grounds it doesn’t feel as familiar”, Ms Coles added.

More than a third (36%) of people are planning to switch in the next 12 months, the survey found.