Falling interest rates leave 52% of savings accounts customers in the dark

07 April 2009 / by Rebecca Sargent
Tumbling interest rates have left 22 million savers in the dark over the interest rate on their savings account, research from uSwitch.com has revealed.

According to the report, 51.6 per cent of savers have no idea what level of interest their savings account is paying since interest rates began falling six months ago.

Since October last year, the Bank of England has cut interest rates six times, from five percent to its current rate of 0.5 per cent, taking savings rates with it. However, the study from uSwitch.com has found that 3.7 million savers have not even attempted to check how their interest rate has been affected, and 22 million have no idea what theirs is.

Commenting, Rumina Hassam, personal finance expert at uSwitch.com said: "What is concerning is the sheer number of savers who have become so despondent by the effects of the base rate cuts that they have absolutely no idea about what level of interest they are earning.

"Whilst this consumer sentiment is understandable, this kind of apathy will play into providers' hands. If savers don't vote with their feet and move their money away from poor performing accounts, providers will just carry on as they are."

Of those savers who are left in the dark, 2.6 million believe that their savings account provider is to blame for their lack of knowledge, as they have failed to keep them up to date with their interest rate cuts.

Ms Hassam added: "With the Bank of England base rate already at a historic low, and no one sure whether it will decrease again this week, it is more vital than ever that providers update savers if their interest rate declines at any stage."

Meanwhile, the report found that the need to compare savings accounts and switch to a competitive deal was realised by the quarter of savers who switched savings accounts last year.

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