• 50.21% of non-ISA instant access accounts pay 0.5% or less
• Savers with an average balance could earn £200 more per year by switching
• Those sitting in the lowest paying accounts are missing out on £350 per year
• Individual savings balances increased by £8.2bn in November 2022, driven by growth in fixed-rate accounts (Source: Bank of England)

Over half of instant-access non-ISA savings accounts are still earning 0.5% or less, despite savings rates increasing in recent months.

Paragon Bank analysis of the latest data from CACI, covering November 2022, shows that 50.2% of easy-access non-ISA savings accounts by volume earn 0.50% or less, with one in 10 (9.8%) of accounts earning less than 0.10%.

That translates to 25.4 million individual accounts and, by value, equates to £260 billion languishing in accounts offering poor returns. CACI compiles the savings deposits of 34 leading providers of adult cash savings.

Savers could be missing out. Data from Moneyfacts, which includes every rate offered not just those paying the most, showed the average non-ISA easy access rate rose to 1.43% in December 2022, the highest point in over 13 years (1.55% in January 2009).

A saver with an average instant-access non-ISA balance of £12,465 could earn £211.90 more per year if they switched from an account paying 0.50% to one paying 2.20%. That increases to £261.76 for balances earning less than 0.10% currently and £351.51 if the saver moves from a 0.10% account to a defined access account paying 2.91%.

Derek Sprawling, Paragon Bank Savings Director, said: “In a low-interest rate environment, there wasn’t a huge incentive for savers to switch from poor-paying accounts, but those days are over and there is an opportunity to make a material difference today. This could translate to hundreds of pounds more in your pocket, which is much needed in these challenging economic times.

"Many savers will be aware of the cash incentives for switching their current account and hear about them in the media. A similar scale of upside is available switching savings”

Overall, total savings balances held by the CACI contributors increased in November 2022, adding approximately £6 billion to £1.018 trillion. Fixed-term accounts saw the greatest increase, spurred by better rates on offer and more competition; ISA fixed-term accounts grew from £82.3 billion to £86.6 billion and non-ISA fixed savings balances grew by £7 billion to £85.6 billion.

The proportion of accounts containing up to £1,000 continued to fall during the month, finishing at 54.52%. That has reduced from 55.22% at the start of 2022 and down from 60.14% in January 2019.

Derek Sprawling added: “You would imagine that people would be saving less as household budgets are squeezed, but our own research shows that some households have been choosing to save more to protect themselves in uncertain times. In addition, the increase in fixed-rate accounts has clearly made these more attractive to savers, acting as a driver of balance growth as investors balance risk and reward.”

For further information contact:

Michael Clarke
Head of Media Relations
07740090746

Notes to editors:

Paragon Bank PLC a subsidiary of the Paragon Banking Group PLC which is a FTSE 250 company based in Solihull in the West Midlands. Established in 1985, Paragon Banking Group PLC has over £13 billion of assets under management and manages over 450,000 customer accounts.

Paragon Bank PLC is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Registered in England number 05390593. Registered office 51 Homer Road, Solihull, West Midlands B91 3QJ. Paragon Bank PLC is registered on the Financial Services Register under the firm reference number 604551.