'Top' savings accounts penalise more than 18 million Brits claims Sainsbury's

27 October 2008 / by Rebecca Sargent
Millions of Brits are being penalised for withdrawing money from their savings accounts, new research from Sainsbury's Finance has revealed.

Sainsbury's research has found that more than 13 million people claim to have £165billion invested in easy access savings accounts that impose penalties on withdrawals. A further 5 million people claim to have money in penalty accounts but are unsure of the amount.

Furthermore, the analysis of the top 50 instant access savings accounts found that 24 per cent restrict the number of withdrawals allowed on the account and 8 per cent charge for the pleasure.

Despite such penalties, including the removal of any interest for a month following a withdrawal, 17 million people claim they have made withdrawals worth at least £46billion in the last twelve months.

Commenting on the penalty accounts, head of savings at Sainsbury's Finance, Helen Cook, said: "There are a number of accounts that offer a very attractive rate of return provided you don't make a withdrawal. If you don't need to access your savings, these accounts can be very attractive, but you have to take money out the rate of interest you receive can fall substantially."

As the cost of living continued to rise as the UK heads towards a recession, and Brits struggle to pay the bills, Ms Cook is encouraging savers to opt for an account that doesn't impose penalties, like the Sainsbury's Internet Saver.

"Given the rising cost of living and economic difficulties, it may be worth moving your savings to an account without penalties if you think you may have to access your savings," said Ms Cook.

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