An alarming 31 million Britons are unknowingly losing money in 'zombie' savings accounts, which could cost the average saver £560 per year compared to better options, according to personal finance expert Aaron Peake. These accounts are characterised by dismal interest rates that often fail to keep pace with inflation.
Peake warned that many savers keep their funds tied up with their current bank without questioning poor rates. He advised checking if savings rates are below inflation, currently 3.4%, as that means money is losing value. He recommended shopping around and using price comparison websites to find better deals.
Data from CredAbility shows that £186 billion is languishing in UK accounts yielding just 1.5% interest. For example, £10,000 in an easy-access account at 1.5% generates £240 annually, while a top-rated account at 5% would yield £800—an extra £560 per year.
Peake reassured savers that better returns are available without locking money away or sacrificing access. With the Bank of England expected to cut base rates soon, he urged swift action to avoid further reductions in savings rates.
