More than one million people in the UK are missing out on potential savings of up to £4,700 a year, as major banks continue to report substantial profits. Research from savings provider Spring reveals that 1.04 million current accounts holding more than £50,000 paid zero interest as of March 2026, with a combined £116 billion sitting idle. The average balance in these accounts stood at £111,537.
Banks benefit from low interest on deposits
The findings raise fresh questions about whether banks are adequately rewarding savers. While many high street lenders offer little or no interest on current account balances, they use these deposits to fund lending through mortgages, personal loans, and credit cards, where customers face significantly higher borrowing costs. The gap between earnings from loans and payments to savers has fueled a surge in bank profits.
Britain's largest lenders continue to report strong earnings. Lloyds Banking Group posted pre-tax profits of £6.7 billion for 2025, a 12% increase from the previous year. NatWest reported pre-tax profits of £7.7 billion, up 25%.
Most current accounts pay no interest
According to Spring's analysis of data from consumer data provider Caci, 79 million of the UK's 91 million current accounts in credit—approximately 87%—paid no interest at all. Derek Sprawling, head of money at Spring, noted that many people are unaware of how much they are losing. He said: "Often, it comes down to convenience or habit, but with balances of £50,000 or more, the missed returns can be significant."
A Spring survey found that 36% of people keep their savings with their main current account provider, while 21% leave savings directly in their current account. The company attributes this to a combination of habit, uncertainty, and confusion, which prevents people from moving money into higher-paying accounts.
Inflation erodes savings value
The cost of inaction can be substantial. According to the Bank of England's inflation calculator, something costing £100 in 2016 would now cost around £140. Inflation currently stands at 2.8%, though it peaked at 11.1% in October 2022 during the cost-of-living crisis. In contrast, savers willing to switch can secure better returns. Finance website Moneyfacts reports that the average easy-access savings account pays around 2.5%, while the average one-year fixed-rate account offers 4.23%.
Cash ISAs offer similar rates, with one-year fixed deals averaging 4.25%. Interest earned in a cash ISA remains tax-free, driving a rush to use the allowance before planned changes take effect. Bank of England figures show savers deposited £12 billion into cash ISAs in April alone—the second-highest monthly inflow ever recorded. The rush comes ahead of a planned reduction in the annual cash ISA allowance from £20,000 to £12,000 from April 2027.
Charlene Young, senior pensions and savings expert at AJ Bell, said many savers are keen to maximize the current allowance while they can. However, she warned that inflation remains a threat to cash held in low-paying accounts. She added: "We already had sticky inflation before the Iran conflict, and further surges are expected as the full impact of supply chain disruption and energy shocks filters through."
