Rethinking the role of savings
In an era where interest rates have reached their highest levels in years, it seems counterintuitive that according to Moneyfactscompare an estimated £252 billion is still sitting in UK current or savings accounts earning no interest at all. Yet this is the reality for millions of consumers. Why?
The answer lies in a complex mix of customer behaviour, tax anxiety, and outdated assumptions about how savings accounts work.
The comfort of the familiar
Many people continue to use traditional current accounts or legacy savings accounts simply because they always have. These accounts are familiar, easy to access, and often linked to their main bank. The idea of switching even for a better return feels like unnecessary admin.
According to an Experian study, 40% of consumers don’t switch because they feel they don’t have enough savings to make it worthwhile.
But this inertia comes at a cost. With inflation still biting and the cost of living high, every pound not earning interest (winning) is a pound losing.
The myth of locked-away savings
Another major barrier is the misconception that savings accounts are restrictive, and that once money is moved into a savings account, it’s locked away and inaccessible. This simply isn’t true.
Many modern savings accounts, including easy-access and notice accounts, offer flexibility while still delivering meaningful returns. The idea that “savings” equals “inaccessible” is a legacy of older product designs.
Today’s offerings are far more nuanced, especially with the rise of digital banking and mobile apps, which give customers instant, on-the-go access to their savings. It’s essential that people understand just how accessible their money can be in a savings account.
Tax code confusion and the fear of the unknown
Recent changes to HMRC tax codes have also played a role. As interest rates have risen, more savers are exceeding their Personal Savings Allowance, triggering unexpected tax adjustments. For some, the response has been to move money back into non-interest earning current accounts—ironically, to avoid the very interest that could help them grow their savings.
Let’s help people make their money work smarter
At Newbury Building Society we have a responsibility and an opportunity to change the narrative. It’s not just about offering great savings products; it’s about bridging the gap between perception and reality.
By educating customers, simplifying choices, and proactively guiding them toward smarter options, we can help them unlock the full potential of their money. Because in today’s environment, leaving cash idle isn’t just a missed opportunity—it’s a silent cost, and we want to help change that.
If you'd like to talk to a qualified savings adviser about which savings accounts would be suitable for your savings needs, you can book an appointment, call us or drop into a branch.