Britons urged to take action as thousands miss out on £777 cash boost

British savers could boost their annual returns by up to £777 simply by moving £25,000 from a traditional high street bank to a better-paying easy access account, new research shows.

Analysis from Moneyfactscompare.co.uk found that the difference comes down to the wide gap between typical high street savings rates and those offered by challenger banks.

While the big banks are paying an average of just 1.39 per cent – earning only £347.50 a year on a £25,000 balance – the top easy access deals currently available through their website pay around £1,125 over the same period.

That £777 gap means savers could more than double their returns simply by choosing a more competitive account. Experts say the findings show how staying loyal to familiar banks could be quietly costing people hundreds of pounds each year.

The findings come as the comparison site prepares to launch a new TV campaign this month, encouraging savers to look for better returns on their money.

Rising inflation has made the gap between accounts even clearer. A £25,000 balance in a typical high street easy access account earning £347.50 a year actually loses £602.50 in real terms once inflation is taken into account.

On the other hand, the top-paying accounts they featured generate around £1,125 annually – a real gain of £175 after inflation. This means savers with traditional banks aren’t just missing out on higher returns, they’re watching their money lose value over time.

Moneyfactscompare.co.uk said its analysis shows that reviewing and changing savings accounts is one of the simplest ways to protect cash from being eroded by rising prices.

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While high street banks continue offering below-inflation rates, alternative providers are delivering returns that exceed the rising cost of living.

These calculations assume no changes to interest rates over the twelve-month period and are based on current market conditions.

Despite these potential gains, research indicates that many British savers remain stuck in low-yielding accounts. The Moneyfacts Savings Trends Index reveals that 41 per cent of people store their money in current accounts offering minimal interest.

Nearly a quarter of savers have never changed their savings account, whilst another 23 per cent switch less frequently than every two years. This inertia means many miss out on better rates, particularly given that fixed savings deals typically remain available for just 45 days.

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Recent Bank of England figures show households deposited an additional £7.9billion with banks and building societies in September. Of this sum, £5.8billion went into easy access savings and current accounts.

These patterns suggest widespread complacency about savings returns, even as inflation continues eroding the value of cash held in poorly performing accounts.

Adam French, Head of News at Moneyfactscompare.co.uk, said: “Big banks are taking far too many savers for granted by paying them paltry returns on their savings, but the best way to fight back is to ditch your apathy.

“Whether you’re saving for financial security, a special occasion or a big purchase, shopping around for the best interest rates really can make life more interesting.”

He emphasised that modest rate differences accumulate significantly over time, particularly when inflation is factored in. French also noted that utilising cash ISAs could help taxpayers maximise returns by protecting interest from tax.

Richard Ward, Sales and Marketing Director at Moneyfactscompare.co.uk, said: “However, there are still many consumers getting a raw deal on their savings or having their hard-earned cash eroded by the rising cost of living.

“We hope our new TV adverts prompt savers to review their accounts and consider making a switch.”