SAVERS have been urged to consider lesser-known providers to avoid missing out on hundreds of pounds in interest, following new analysis from Moneyfacts. One financial expert warned that “big banks are relying on inertia, full stop”, while another added “loyalty is a synonym of apathy”.
Moneyfacts found that, on average, the biggest banks offer just 1.19% on their flexible easy access accounts, compared to 1.37% last year. The average easy access rate sits at 2.42%.
However, the research found the top challenger banks offer 4.12% on average across their easy access accounts.
Based on this, a saver with £10,000 in an easy access account earning a typical big bank rate could earn £293 more a year by switching to a typical challenger bank rate.
Hundreds of pounds worse off
Caitlyn Eastell, Personal Finance Analyst at Moneyfactscompare.co.uk, said: “Loyalty to big banks can leave savers hundreds of pounds worse off, an amount that many may struggle to spare. Switching to a lesser-known challenger bank could help offset this, as they often offer more attractive rates.
“Someone with £10,000 in a typical big bank easy access account could earn just £119 in a year, compared to the £412 in a typical top challenger bank easy-access account. The incentive to switch quickly becomes clear, but even small differences in interest rates can make a big impact over time.
“However, savers should remain alert. Challenger banks often lead the market with headline rates that include limited-time bonuses, sometimes exceeding 2%. Bonus rates reward active switchers, allowing them to access the best rates and boosted returns in the short-term, but they also drive competition between providers, pushing banks to offer better deals all-round.
“Once bonuses expire, rates can fall sharply, so passive savers risk being left behind and those seeking stability may find these less suitable for long-term planning.”
Banks relying on inertia
Philly Ponniah, Chartered Wealth Manager and Financial Coach at Philly Financial, said “big banks are relying on inertia, full stop”.
She continued: “Paying 1.19% when challengers average over 4% is a huge loyalty penalty. In a year where rates are drifting down, staying put will cost you. Easy access should still work hard, and switching takes minutes online. The key point is that you do not need to take extra risk to earn more.
“As long as the bank is FSCS-protected, your money has the same safety net up to the limit. But savers need to stay alert as many top rates include short-term bonuses. When those end, the rate can reduce fast.
“The winners are active savers who review their accounts at least once a year and move if needed. Choosing an account that pays interest monthly also gives you flexibility, as you can walk away with the interest earned if you switch mid-year.”
Samuel Mather-Holgate, Managing Director & IFA at Swindon-based Mather and Murray Financial, also urged savers to be proactive.
He said: “With rates likely headed south based on last week’s murmurings from the Bank of England, savers need to bring their A-game in 2026. Be active, search around for the best deals and do not feel you need to be loyal to your bank just because you have been with them all your life.”
Loyalty a synonym of apathy
Meanwhile, Riz Malik, Director at Southend-on-Sea-based wealth management firm, R3 Wealth, said: “Is the reason people stay with poor savings accounts really loyalty or is it that most don’t want to deal with the admin of moving for better rates? Loyalty is a synonym of apathy.
“Fortunately, there are now platforms to make switching easier to ensure your bank is not taking advantage of your loyalty or apathy. In 2026, switching accounts is extremely easy so do not delay.”
Rob Mansfield, Independent Financial Advisor at Rootes Wealth Management, said big banks will take advantage of people not staying on top of what’s available in the wider market.
He said: “Saving cash can be convenient but it still requires work and keeping on top of rates. Making sure your money is working for you as hard as it can is really important.
“Banks will take advantage of those not keeping up to date with rates. There are lots of different institutions you can save with but make sure they’re covered by the Financial Services Compensation Scheme and be aware of whether they’re sharing a licence with another brand or have their own.”
While Scott Gallacher, Director at Leicester-based Rowley Turton, a financial adviser, pointed the finger at the government and regulator.
He said: “Loyalty rarely pays in banking. The gap persists largely because banks rely on customer inertia. MPs and regulators have known about the issue for years, yet the pricing gap remains. Until it narrows meaningfully, millions will continue to earn far less than they could elsewhere.”
