20 May 2024

Welsh savers are missing out as over £14bn is sitting in accounts earning 1% or less

Savers in Wales are missing out on higher interest payments as new data reveals almost £15bn is held in savings and current accounts earning 1% or less.

The figures come from a recent CACI report which shows £14.5bn is sitting in accounts earning 1% or less [1]. Across Wales there is around £40bn in savings and current accounts [2], meaning almost 40% of this money is missing out on better interest rates. Currently, the average amount held in savings accounts in Wales sits at £7,337 [3], which means the return difference between a 1% and a 5% interest account could be as much as £293 for these savers, across the year.

The Bank of England’s 14 consecutive base rate hikes have led to the highest interest rates seen in 16 years, recently held for the sixth time at 5.25%. This has resulted in higher savings rate accounts being available on the market, offering customers interest as high as 6%.

Despite this, billions of pounds in savings across Wales remain in low-interest rate accounts.

In response, Principality Building Society is urging people in Wales to consider letting their savings work harder for them through higher interest accounts. Last year, Wales’ largest building society paid a higher interest rate than the market average [4] and currently offers savings rates between 3.5% and 6% for new and existing customers [5].

Vicky Wales, Chief Customer Officer at Principality Building Society, said: “We strongly urge savers across Wales to compare their current returns with other available rates on the market. Interest rates have been a focal point over the last few years due to the prolonged period of a higher Bank of England base rate. This has led to calls for banks and building societies to pass higher savings rates on to their customers, which is something we are committed to at Principality. Last year, we paid our members better interest returns than the market average demonstrating our loyalty to our customers. However, not enough emphasis is being placed on encouraging customers to stay informed about the rates available.

"As a customer, doing your research and shopping around can now significantly impact the return on your savings.

We invite people across Wales, whether you’re currently a Principality customer or not, to drop into one of our 53 branches across Wales to speak with one of our savings specialists who are on hand to help answer any questions you might have and to find out how to make your money work harder for you. We’re here to make life’s hopes and aspirations possible.”

A survey conducted by the Building Society shows that 42% of Principality’s members regularly check their savings rates to compare with other market rates, with 70% of members saying Principality offers a range of products suitable to their financial needs. More than 60% also said they would need to rely on their savings to some extent for their retirement plans [6].

 

Principality Building Society remains committed to supporting Welsh communities and has 53 branches and 15 agencies across Wales and the borders.

For more information on making your money work harder for you, visit your local Principality branch today, or view our savings accounts.

Sources:

[1] £14.5bn in Rest of Market Current Accounts paying 0.00% to 1.00% and Instant Access non-ISA Savings Accounts paying 0.01% to 1.00% in Wales only. Source: CACI’s Current Account & Savings Database (CSDB), Rest of Market Stock at Feb 2024.

[2] £38bn in Rest of Market Current Accounts and Instant Access non-ISA Savings Accounts in Wales only. Source: CACI’s Current Account & Savings Database (CSDB), Rest of Market Stock at Feb 2024.

[3] www.finder.com/uk/savings-accounts/saving-statistics

[4] Principality Building Society average savings interest rate at 3.08% versus the Rest of Market average of 2.46%. Data Source: CACI’s Current Account & Savings Database (CSDB), Weighted Average Interest Rate for January 2023 - December 2023.

[5] www.principality.co.uk/savings-accounts

[6] Figures come from a Member Pulse survey conducted by Principality Building Society which surveyed 299 of its customers.

Published: 20/05/2024