Savings warning to Brits with £10,000 in accounts

Brits with more than £10,000 in savings have been urged to check their money as more than 51 million accounts are earning a meagre 1.5% or less interest, far below the rate of inflation. The vast majority of these accounts have balances of more than £10,000, leaving savers with large sums of money earning next to nothing, according to Spring’s analysis of CACI data.

The rate of inflation, which measures price rises over time, was much higher at 2.8% in the year to April, down from 3.3% in the year to March. Derek Sprawling, head of money at Spring, said: “The fact that £338 billion is sitting in savings accounts earning an average rate of just 1.03% shows just how much money is lying idle in low-paying accounts."

He added: “The vast majority of this money is held in accounts with more than £10,000, with some savers holding far more while earning next to nothing.

"Savers may think they need to accept these rates in return for instant transfers to their current account, but that’s no longer the case.”

A staggering £338billion was held across the accounts paying 1.5% interest or less, with an average balance of £6,593, but much larger sums were also sitting around. Surprisingly, more than 372,000 accounts had more than £100,000 ticking over.

The fact that inflation dropped in April does not mean prices are falling, but that prices are rising more slowly than before.

Ultimately, inlfation means that your £10,000 today may not hold the same value in a year, because the price of goods will have increased.

But if savers moved their £10,000 in a bank aligned with inflation, they could earn £280 by the end of the term, compared to just £150, so your money will hold its value better.

At present, savers can get more lucrative deals for their money, with certain easy access accounts offering more than 4% interest. Spring's Special Edition Easy Saver is paying 4.3%, while Sidekick Multi Shield is paying 4.23%.

Savers also have the option to put their money away in an ISA. Any interest earned on up to £20,000 worth of savings is completely exempt from UK tax every tax year.

However, this will change from April 6, 2027. While the overall annual ISA allowance remains at £20,000, savers aged 18 to 64 will see their maximum Cash ISA contribution capped at £12,000.

The remaining £8,000 must be directed into investment products, such as a Stocks and Shares ISA, to use the full £20,000 limit.