SAVERS are losing out on £373 a year due to a “loyalty penalty” with experts warning “you are letting inflation and bank margins eat your money”.
It was announced today that the Consumer Price Index (CPI) remained at 2.8% during May, while the Moneyfacts Average Savings Rate currently sits at 3.57%, higher than inflation.
According to MoneyFacts, there are currently 1,825 savings accounts that beat inflation (213 easy access, 179 notice accounts, 183 variable rate ISAs, 403 fixed rate ISAs and 847 fixed rate bonds).
In June 2025, there were 1,437 deals that could beat CPI which was then at 3.4% (May 2025 CPI) and in June 2024, there were 1,622 deals that could beat CPI which was at 2% (May 2024 CPI).
Caitlyn Eastell, Personal Finance Analyst at Moneyfactscompare.co.uk, said it’s still important to shop around for the best deal because you could lose out on £373 per year if you don’t.
She added: “As prices rise and economic uncertainty persists, easy access accounts are playing a crucial role for households trying to keep emergency cash within reach. However, major high street banks are lagging, with their most flexible accounts offering just 1.16% collectively, leaving savers with little protection against rising prices.
“By contrast, some challenger banks are offering market-leading easy access rates of up 4.89%. Savers with £10,000 sitting in a big bank easy access account will earn just £116 a year, compared to the £489 they could earn just by switching to the best account.
“Once savers recognise this £373 yearly loyalty penalty the real-term benefit is difficult to ignore and they will be better off once they make the switch. It’s difficult to stay put when over 200 easy access accounts pay inflation-busting rates. Savers who move away from low-paying high street banks can grow the real value of their cash and stop emergency funds being eaten away by inflation.”
Stop being loyal to institutions that aren’t being loyal to you
Riz Malik, Independent Financial Adviser at Southend-on-Sea-based R3 Wealth, said savers need to shop around for the best rates.
He added: “Don’t assume your bank’s current account is going to give you market leading rates on your savings.
“It’s understandable that opening accounts is tiresome but there are platforms that allow you to switch between savings accounts with relative ease. It’s your money and it’s up to you that it is working as hard possible.”
David Stirling, Independent Financial Adviser at Belfast-based Mint Wealth, said having cash in standard high street bank accounts will lead to you losing out.
He added: “The message is clear: stop being loyal to institutions that aren’t being loyal to you. With CPI holding steady at 2.8% and over 1,800 savings accounts now beating inflation, the opportunity is clearly there, but sadly it won’t come to you.
“If your savings account is still wearing a high street badge and paying a high street rate, chances are it’s quietly losing you money in real terms every single month. You should treat your savings like you’d treat any other bill and review it, question it and don’t be afraid to walk.
“The best easy access rates are nudging 4.89% right now. That’s not a rounding error compared to the 1.16% the big banks are offering, it’s a completely different financial outcome.”
You are letting inflation and bank margins eat your money
Nouran Moustafa, Practice Principal & IFA at Roxton Wealth, said “convenience should not mean accepting a terrible return”.
She added: “Savers need to stop treating loyalty like a financial strategy. If your cash is sitting with a big high street bank paying a poor rate, you are effectively letting inflation and bank margins eat your money. The good news is that savers finally have a real opportunity to beat inflation on cash, but only if they actually shop around.
“A rate above CPI means your money is not just sitting there looking safe; it is protecting some of its real value. But the difference between 1.16% and nearly 5% is not small. On larger balances, that is real money being lost for no good reason. My advice is simple: keep emergency money accessible, but do not leave it lazy.
“Check the rate, check Financial Services Compensation Scheme (FSCS) protection, check withdrawal rules and review regularly. Easy access is useful, but convenience should not mean accepting a terrible return. The banks rely on inertia. Savers need to be more awake than that. Your cash should be working, not politely shrinking in the background.”
Harry Goodliffe, Director at Winchester-based HTG Mortgages, urged people to get rid of accounts with low interest rates.
He added: “If your bank is paying 1%, it’s not really trying to attract your savings, so get rid. Too many savers are being rewarded poorly for their loyalty. The good news is that there are now hundreds of accounts beating inflation, which means savers have genuine opportunities to grow the real value of their cash.
“The importance of shopping around can’t be overstated. Most people wouldn’t accept paying hundreds of pounds extra for the same insurance policy, yet many unknowingly accept the equivalent loss on their savings every year. The excuse that switching is too much stress doesn’t really stack up anymore, either.
“These days, you can often open a new savings account from your sofa in just a few minutes using your phone. A quick review of your savings could be one of the highest-paid hours you spend all year.”
Photo by Jannes Glas on Unsplash.
