Warning to anyone with £10,000 or over sat in their bank account

Paragon Bank’s analysis of CACI data showed that 261k interest bearing adult accounts containing £10,000 or over were earning 1% or less in July 2024

Over a quarter of a million adult cash savings accounts containing balances of £10,000 or over are earning 1% or less despite the growth in savings rates over the past two years, costing savers over £250 million in lost interest.

Paragon Bank’s analysis of CACI data showed that 261k interest bearing adult accounts containing £10,000 or over were earning 1% or less in July 2024. Over 8,500 accounts boasting balances of £100,000 or above were earning that figure, rising to 42,700 accounts containing £50,000 or above.

Collectively, these savers are missing out on £258 million in savings interest each year. By value, CACI data shows that £8.6 billion is held in the quarter of a million accounts, creating an average balance of £32,811. Based on 1% interest, the average account could expect to earn £328.11 in interest over a year, or collectively £85.9 million.

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If that balance was transferred to an account paying 4%, the interest payment would increase to £1,312.42 over the year, or £343.8 million overall annually. Across the overall adult cash savings market, 2.3 million interest bearing savings accounts are earning 1% or below, equating to £10.1 billion.

Derek Sprawling, Paragon Bank Managing Director of Savings, said in a statement: “Given the range of providers paying generous rates of interest available across the market, it’s remarkable there are still savers with large balances still accepting returns of 1 per cent or below. These savers are seeing their money shrink in real terms as their return remains below inflation and, collectively, are missing out on over £250 million in interest.

“The savings switch message can often get ignored by those with smaller balances, which can be understandable given the relatively small increase in returns, but those with sizeable deposits have a real and genuine incentive to move their money.”