Savings on the rise but apathy still reigns

Savers across the UK could be losing out on billions of pounds in interest according to new research by the Post Office, which reveals that three in ten people have no idea what rate their savings account currently pays. Worryingly, almost half (42 per cent) of savers have always held their savings with the same company and never even looked at another provider.

As new statistics show UK household savings are up to 3.1 per cent for the second quarter of 2007, it seems that continuing financial market volatility could be putting people off more risky investments, and turning the focus towards more traditional methods of savings. But many savers aren’t maximising their savings potential and continuing to hold and pay money into accounts which deliver a poor return.

Despite 42 per cent of savers citing the interest rate as the most important factor3 when choosing a provider, the reality is that 39 per cent have no idea whether their provider upped its rate during the recent base rate rises – of which there were five between January 2006 and October 2007.

And with some of the most popular savings accounts paying as little as 1.05 per cent the Post Office® is urging savers to make sure they take advantage of some of the great interest rates currently available, and know their money is working as hard as it can for them.

Post Office® head of savings Richard Norman said: “There is a stark contrast between the number of people who say they look for the best interest rate, but have never changed providers. Be it loyalty or apathy, if people haven’t kept an eye on their rate they could be missing out hugely.

“The Post Office® is one of the only providers to have passed on all five recent base rate rises in full to its customers and over recent weeks we have seen huge inflows of deposits as people take advantage of the strong savings proposition offered by Post Office®, which includes offering the easiest access to your savings in the UK via our 14,000 branches, telephone and internet banking.”

Post Office® Instant Saver, The Post Office®’s instant access savings account, currently pays a rate of 6 per cent. Instant Saver guarantees to pass on all base rate rises in full until January 2010 and also guarantees to remain within 1.0 pct of the Bank of England base rate for the life of the account. Savers can make six free withdrawals a year with a flat fee of just GBP 1 for any future withdrawals.