A survey commissioned by Chase found that 24% of people leave money idle in current accounts rather than moving it to a savings account. Among those who do so, one in six (17%) leave more than £5,000 in their current account, according to the same survey. Men are particularly prone to leaving large sums of cash not earning interest, the survey indicated. Shaun Port, Managing Director for Daily Banking and Savings at Chase, said in a press release that every pound saved should work as hard as possible for the saver. He added that consumers feel proud and motivated when they see their money moving in a positive way. Port also noted that moving money to savings means it works harder, and even small amounts can grow significantly if left untouched, and that consistency follows when a positive habit is created.
The scale of idle money is substantial. A study by Yorkshire Building Society, using Caci's current account database, found that more than 12 million current accounts in the UK are earning 1% or less in interest on balances above £5,001. The same research estimated that around £411 billion is sitting idle in current accounts. However, an earlier, unspecified piece of research put the figure at £526 billion, highlighting a discrepancy in estimates. The source of the £526 billion figure and its calculation method remain unclear. Laura Pomfret, a consumer guru on BBC Morning Live, warned that people with £5,000 in their bank account are making a mistake by not moving it to a savings account. According to Daily Express - Finance, Pomfret described the problem of leaving money in current accounts, noting that it likely earns little or no interest. She also explained that moving £1,000 to a savings account paying 4% could yield £40 over a year, which could cover a grocery shop or a birthday present.
Financial stress is also prevalent. A survey by Yorkshire Building Society found that more than half (55%) of respondents feel stressed about their finances. Nearly a quarter (24%) of respondents plan to use a credit card to cover costs during the festive season. Around half (51%) of those borrowing expect to clear festive debt within three months. Tina Hughes, Director of Savings at Yorkshire Building Society, said in a press release that with household budgets under pressure and financial stress rising, it is clear many are feeling the pinch, yet millions are still missing out on easy wins like earning interest on their savings.
The exact methodology and sample sizes of the surveys conducted by Chase and Yorkshire Building Society have not been disclosed. Additionally, the current best savings account interest rates available to UK consumers are not specified in the research. The impact of the Iran war on UK fuel and food prices, while potentially relevant to household budgets, is not addressed in the data provided. Despite these unknowns, the message from financial experts is clear: consumers should review their current account balances and consider moving excess funds to higher-interest savings accounts to avoid losing out on potential earnings.