Are you doing enough with your savings?

In Britain, we're simply not saving enough. The latest figures from the Office for National Statistics show the household saving rate was 5.9% in the last quarter of 2012, compared to 4.2% in the first quarter of 2013.

One reason why households aren't putting enough aside is because savings rates are so poor. Many people simply do not see the point in depositing cash in a bank or building society that is paying just 0.05%.

According to Bank of England data, the current average branch-based savings rate is paying 0.26%. On a £10,000 balance, this equates to a paltry £26 interest a year, of which the taxman will still want his slice. By comparison, the current market-leading easy-access account, BM Savings Online Reward, pays 1.70%, which would generate £170 in interest over 12 months on the same £10,000 sum.

The difference between the best and worst savings account is £144 in this example - money that's going begging for those content to remain on an inferior rate. But for fixed-rate products of three, four or five years, the discrepancy between best and worst interest rates can be even higher, making the argument to switch a no-brainer.

But even so, one in four savers currently claims rates are so low it isn't worth switching accounts, according to research by This isn't surprising – savings rates are so low that some current accounts are actually paying more.

Moreover, as at December 2013, banks and building societies are pulling their top-paying fixed-rate bonds just as almost 500,000 savers are about to see their own fixed- rate deals expire. For example, BM Savings has closed its one-year bond – paying 2% – while Coventry BS's Poppy Bond (2.6%) has also closed.

Apathy can damage family finances. Research from HSBC has found more than a third of people in the UK – around 8.8 million households – only have £250 or less set aside as a safety net.

The survey of more than 1,000 UK households found a quarter (25%) have no savings at all to fall back on, while one in 10 has £250 or less. The bank says that, based on average monthly outgoings of £1,500, the latter group would last just five days before running out of funds.

All of the above statistics are glaring adverts for why our Beat The Banks campaign should be adopted across the country. Those risk-averse savers whose money is languishing in poor-paying accounts – as well as those people who do not believe it is worth saving because rates are so poor – must act now.

MoneySuperMarket's head of banking Kevin Mountford says: "It really is important for consumers not to be apathetic about their savings accounts. Although rates may be low, the benefit of switching can be significant, and in some cases add up to hundreds of pounds if you have a sizeable savings pot.

"People can earn extra interest just by being proactive and switching to better-paying easy-access accounts or even current accounts."

Visit our Beat the Banks homepage

Here's our checklist for how savers can Beat The Banks:

Check your rate

If you already have cash in a savings account, check the rate to determine whether you need to switch (and once you have switched, continue checking regularly – see below), as even the rate on the best-paying account can fall dramatically in a short space of time.

"Over time, bonuses expire or rates are chipped away at so what you then receive could be less than appealing, so it's vital to make sure you're monitoring your money over the longer term," explains Anna Bowes of

In November 2012, for example, one of the best easy-access savings accounts was the Post Office Online Saver (Issue 8) - paying 2.35% gross. As this rate included a bonus of 0.70%, the rate was always due to fall after 12 months; however, in addition, the underlying rate on this account has also dropped – so the current rate is now just 0.90% gross.

Search the market

In a savings market where there are so many providers and products, it's next to impossible to trawl the market yourself. You're better off using a comparison website to find the most suitable savings account for your money.

A good starting point is our own comparison tool at – it allows you to choose what type of account you want or, if you are interested in a fixed-term account, input which timeframe you prefer to lock your cash away for.

Choose a suitable product

If you've never saved before, you'll need to check whether you want an easy-access savings account or a fixed-rate product of some type. For example, if you want to interest rate you earn on your savings and are happy to lock your money away for a set period of time, then a fixed-rate product might be for you. However, if you want to make additional deposits beyond the upfront opening deposit, or make withdrawals, then a product with easy access might be best.

Use your cash Isa allowance

If you're a UK taxpayer, then a cash Isa should be the first port of call for your savings. Everyone aged over 16 can save up to £11,880 in an Isa during the 2004/15 tax year – of which £5,940 can be saved in cash. This means all interest you earn in your Isa is free of tax, so a cash Isa should always be the first home for your savings.

Switch accounts

Don't ever think it's too much hassle to switch savings account. Once you've chosen a new provider, all you have to do is apply - your new provider will open the account for you and, once it is done, you can simply transfer your funds from the old to the new. Ideally, you'd then close your old savings account.

However, if you are switching between cash Isas there are rules you'll have to follow. Your old and new Isa provider should communicate between them to transfer your money, while at the same time ensuring you still enjoy the tax-free benefits. Don't worry about the admin: your new provider will do the legwork.

Check the current account market, too

"Incredibly, savers can earn more interest through their current account than most savings accounts at the moment," says Mountford. "This is especially appealing for those savers out there who have been looking for decent returns on their savings over the last year."

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