Young people are likely to stay in the same savings account for four years, longer than they stay in a typical job, according to new research.
Those under 35 tend to change employers every two and a half years, according to data from Smart Money People, which means they are more loyal to their bank than their job.
This despite being able to earn more interest if they switched their account to another provider.
Research says people aged 18 to 34 have saved an average of £6,375 each into their savings, but 50 per cent don’t even know their current savings interest rate.
Savings rates: The best available are over 5%, while some banks offer less than half that
Savers could earn up to £325 extra in interest on their £6,375 savings if they moved their money to another easy-access savings account, according to Smart Money People’s sister site Be Clever With Your Cash.
Despite not knowing the details of their rate, up to 66 per cent of young savers are thinking about jumping ship in the next six months as interest rates look likely to fall.
Currently, the best easy access savings account, offered by Paragon, will return 5.0 per cent interest, with 4.9 per cent offered by Aldermore, 4.85 per cent offered by Leeds Building Society and 4. .85 percent offered by Chip.
Meanwhile, the Easy Access Cash Isa will see you earn 5.17 per cent with Plum, as part of a bonus for your first 12 months, 5.16 per cent with Moneybox under a similar bonus scheme and 5.16 per cent with Moneybox under a similar bonus scheme and 1 percent with Chip, whose rate will not drop. out after 12 months.
> Find top savings rates using our independent best buy tables
The larger banks, however, offer much lower savings rates, with just 1.66 per cent available on Barclay’s Everyday Saver account, for example.
However, it seems that savings rates are not at the top of many people’s priority list.
One such case is that of Eleanor Heath, 24, who has saved £9,300 in an easy-access savings account which she has maintained for the past four years.
“I’ve considered switching to a term savings account for higher interest, but for these savings I need instant access that higher interest accounts don’t always offer,” Eleanor told This is Money.
Having little money to invest in long-term investments, young people often prefer accounts that can give them access to their money when they need it.
Easy access: Eleanor says her savings account is right for her because it gives her instant access to her cash.
“This savings account is for general use and for booking vacations,” he said. “I like the account because I can transfer in and out of it at any time, it’s app-based so I can easily transfer between accounts and see my current balance.”
Eleanor, however, said she plans to move to a new bank sometime next year. “I’m currently in no hurry to change this savings account,” she said.
She said: ‘I kept the account simply because I don’t have time to go through endless questions to open a new account, it’s not at the top of my list at the moment. But when my savings increase I will definitely switch to earn more interest.’
Now or never: Andy Webb says savers must act to lock in fixed rate
On her current £9,300, a rate of 1.65 per cent would earn Eleanor £154.62 over the course of a year. By comparison, 12 months of Plum’s bonus account at 5.17 per cent would leave you with £492.37 in interest, or £485.55 at Chip’s 5.1 per cent rate.
Andy Webb, money expert at Be Clever With Your Cash, said: “The main reason younger savers have remained loyal to their banks is fear of the moving process. They are the age group that finds the move most stressful. change of financial products.
As is the case with Eleanor, Webb said: ‘A third of this age group have been using their savings to help pay their daily expenses, suggesting they have not wanted to transfer their funds because they want immediate access to money. ‘
However, choosing to stay isn’t unique to young people: 24 percent of savers don’t think it’s worth the effort to transfer their funds, while another 17 percent said there are too many savings account options and not enough. they know what to do.
Still, almost half do not feel they are being rewarded for their loyalty to their savings provider, which could be affecting the growing proportion of people seeking greener pastures.
While the hassle of switching providers can put people off, a whopping 88 per cent of savers are looking to switch providers in the next six months to find a better interest rate.
Smart Money People chief executive Jacqueline Dewey said: ‘Savers are voting with their feet by moving their existing savings funds to new providers this spring. Customers who want to transfer their money should also consider factors such as the provider’s customer service, accessibility and technology.’
Webb added: “Savers must act now to take advantage of the best deals on the market.” But these rates will not remain the same forever.
‘If you’re earning very little at the moment then it’s worth moving your money to get the highest rates, just be aware that variable rates can, and probably will, fall this year. Therefore, locking in a fixed rate will guarantee higher rates throughout the period.’
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