Savers are missing out on roughly £8bn every year

| June 3, 2008 | 0 Comments

According to the Post Office, savers are missing out on around approximately £8 billion in interest every year.

Accounts which pay interest rates well below the base rate means savers are losing out and this is at a particularly difficult time when inflation is at a 4-year high, food prices are at a record-high and the days of easy credit are long gone.

Therefore, the Post Office is encouraging savers, whose cash is sitting in low rate accounts, to move it where it will work as hard as possible for them.

A typical saver with an average deposit of £5,000 sat in an account paying an interest of 2% could be missing out on up to £188 a year, according to the Post Office.

Last year, £26.4 billion worth of new saving deposits were made across the UK, but with many savers unaware of their interest rate, billions of pounds of interest is being lost.

Nearly one third of savers have no clue what rate their savings account currently pays, revealed the Post Office.

The Post Office believes the interest rate should be one of the most important factors when it comes to choosing a savings account.

Commenting on the findings, Richard Norman of the Post Office, said it is time savers started to take care of their savings by choosing a home for them wisely, particularly in the current economic downturn. There are hundreds of poor paying accounts, so people need to avoid them.

Mr Norman advises contacting your provider to establish the interest rate you are currently earning. If it is paying a low rate and you want it to earn more then move it, urges Mr Norman.

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