Brits Lose out on GBP2.2 Billion by not Checking their Current Account Rates

CHESTER, England, July 4, 2011 /PRNewswire/ --

• 62 Per Cent of Current Account Holders have Never or can't Remember the Last Time they Checked Interest Rates on their Account
• Only one in two Cardholders (48%) Check the Interest Rates on their Credit Cards
• Check Rates and Save up to GBP926 Annually Says moneysupermarket.com ^[2]

Apathetic Brits are missing out on hundreds of pounds a year by failing to check the interest rates on their financial products, including credit cards, current accounts, savings accounts and personal loans, research by the UK's number one comparison site moneysupermarket.com has revealed.

The research found that one in four (27 per cent) have never checked their current account interest rate, 24 per cent have never checked the rate on their credit card and 13 per cent have never looked at the rate on their savings account. In addition, one in three (34 per cent) said they couldn't remember the last time they checked the rate on their current account, over a quarter (29 per cent) were unable to name the last time they checked their savings rate, and 28 per cent couldn't remember checking their credit card rate. As a result, many UK consumers who are failing to make the most of their money at a time when every penny counts.

Only ten per cent of credit card customers check their rate at least once a month, and just 15 per cent check their current account and savings rates monthly.

The effects of failing to check the rates on your financial products can be significant. moneysupermarket.com looked at the amount that could be earned or saved just by checking the rate and switching to a market leading deal*. Taking a savings balance of GBP10,000, if this was left to linger in a savings account paying the current Bank of England average savings rate of 0.3 per cent, it would earn just GBP30 in interest over a year. Switching to a market leading easy access savings account, such as Coventry Building Societies Poppy Online Save paying 3.10 per cent would earn GBP310 - an additional GBP280 in interest.

A card-holder keeping an average balance of GBP2,221 on a credit card with the UK average APR of 18.4 per cent, would end up paying a whopping GBP286 in extra interest over a year, compared to switching to the market leading rate of 0 per cent for 20 months on the Barclaycard Platinum Card.

A substantial GBP285 could be saved from switching GBP7,600 from the market average loan rate of 12.85 per cent to the leading loan from Nationwide at 6.7 per cent. With current account rates, the product that consumers are least likely to check, someone with a monthly balance of GBP1,500 moving from a rate of 0.1 per cent interest to the leading interest rate of 5 per cent offered by Santander, could earn an additional GBP75*** in interest in the next year alone. With nearly 30 million Brits not checking their current account rates, they could be losing out on GBP2.2billion in lost interest over the course of the year^[1].

In total, consumers who failed to check their rates and switch across all these products could be missing out on a huge GBP926**** in the next year.

Kevin Mountford, head of banking at moneysupermarket.com  said: "It's surprising to see that apathy still reigns with consumers, who are collectively missing out on earning additional money from being more savvy. Anyone who thinks it is not worthwhile switching accounts should think again. If you haven't checked the rates being offered on your current account, savings accounts, credit cards and personal loans, do so now - you may be shocked at how little interest your are receiving on deposits or how much extra you are paying on borrowing. Taking more control over your finances and using a comparison site to find a better deal could earn you some extra cash at a time when we are all feeling the pinch."

The research also revealed consumers don't check their rates as they don't feel the changes could make a significant difference. One in three (33 per cent) said rate changes would be too small to have any impact on their finances, and a further 24 per cent think their provider will alert them of any changes. One in six assume that the rate just won't change at all!

Kevin Mountford continued: "Any consumer who believes the rate they receive is here to stay is sadly mistaken - on the majority of accounts to you find rate will change over time. Despite a low Bank of England base rate, the difference between the average rates and the best is more than worth the effort in switching and could make a big difference to your finances."

Research conducted by Opinium Research between 21st to 23rd June 2011 across 2013 interviews

Typical high street current interest rate 0.1% over 1 year= GBP1.50 versus

Leading current account interest rate Santander 5% over 1 year = GBP75.00

^[1]Based on UK adult population of 49,529,000

(60% of the total respondents surveyed unable to remember when they last checked their current account, or have never checked their current account = 29, 717, 400 x GBP75 = GBP2, 228, 805, 000)

^[2]Total annual savings= credit cards GBP285.70 + savings account GBP280+ loans GBP285.08 + current account GBP75.00 = GBP925.78

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Kevin Mountford
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SOURCE moneysupermarket.com