UK savers miss out on £1,661 by staying loyal to low-rate accounts - LHV Bank

18 March 2026

8 million UK savers are stuck earning 1% interest or less, costing them valuable returns.
UK’s average pot of £20,000 saved at 2.54% grows to just £22,672 in five years.
At 4%, the same savings would reach £24,333 – a boost of 62%[1].
Inaction could cost savers £1,661 in lost interest.
That’s around £28 a month slipping away due to the “loyalty penalty”.
Savers need clear products with strong rates that deliver what they promise.

Millions of UK savers could miss out on more than £1,600 in interest by leaving their money in low paying accounts rather than moving to a more competitive rate, analysis from LHV Bank shows.

The research looks at what the average saver [2]could earn over the next five years if they left cash in a typical high street easy access account compared with a higher paying alternative.

A saver with £20,000 in an account paying just 2.54%[3] interest would see their balance grow to £22,672 after five years. If that same saver moved their money to an account paying 4%, the balance would be boosted to £24,333 over the same period. [4]

That means savers could be missing out on £1,661 in interest over five years simply by leaving their money where it is. This “loyalty penalty” works out at roughly £28 a month in lost interest.

The same pattern appears with smaller balances, where a saver with £10,000 earning 2.54% would see their balance grow to just £11,336 after five years. If the same savings earned 4%, the balance would be boosted to £12,167.

That is a difference of £830 in interest over five years, with the gap widening each year due to compounding. For a £20,000 balance earning 2.54% compared with 4%, the difference builds steadily:

Year 1: £292 difference in potential interest
Year 2: £603 difference
Year 3: £934 difference
Year 4: £1,286 difference
Year 5: £1,661 difference

These figures are based on rates held constant over five years, comparing a typical high street easy access rate of 2.54% with LHV’s easy access rate of 4.00% AER on balances up to £100,000.[5]

The analysis also reflects the typical savings balances held by UK consumers. The average savings pot per UK adult is just over £19,000, while those under 55 typically hold just over £9,000 in savings.[6]

Despite the clear boost that a higher rate can make over time, millions of savers remain with low paying accounts.

Recent figures show:

Eight million UK savers hold accounts paying 1% interest or less[7]
Seventy per cent of adults believe all banks are basically the same [8]
The nine biggest providers passed on just 28% of base rate rises to easy access savers between January 2022 and May 2023[9]
Yet trust remains high, with 57% of lower earners and 60% of higher earners saying they trust banks and building societies[10]

Inflation also remains a risk for savers. If price growth stays higher than expected, the real value of cash savings will continue to fall unless savers earn stronger returns.

LHV Bank says savers need clearer, simpler savings products with consistently competitive rates, rather than accounts built around rates and/or short term bonuses that fall away after a brief period.

Kris Brewster, Interim CEO of LHV Bank, said:

“Many savers assume their bank will treat them fairly if they stay loyal. In practice the numbers show the opposite is true. Leaving savings in a low paying account for years can quietly chip away at the value of that money.

“Just a small, but significant, difference in rates can create a large gap over time because interest compounds each year. For many households that could mean hundreds or even thousands of pounds lost.

“With the majority of UK adults lacking confidence in financial matters[11], savers need to be able to trust in providers to do the right thing when it comes to savings products. UK savers need clear and simple accounts with strong rates that last, rather than short term offers with gimmicks that drop away after a few months.”