Many savers don’t take into account the effect interest rates have on their investments.
Almost one in three savers have no idea what interest they earn on their cash individual savings accounts (ISAs).
Around 30 per cent of people do not know what extra cash their investments pull in, which rises to 42 per cent of savers aged between 25 and 44, according to a YouGov survey. By contrast only 21 per cent of over-55s do not know what their savings earn them.
Savers with an average of £5,000 in a typical cash ISA would have seen interest payments of only £57 over the last year, with inflation calculated at two per cent in that period. However, inflation at that rate would take a £99 bite out of the original £5,000 cash ISA, leaving a saver £42 out of pocket.
On top of that, the report commissioned by peer-to-peer consumer lender Zopa, shows how unused savers still are at moving their investments around. It found that 46 per cent of Brits have never switched their savings accounts to a new provider.
Zopa’s investment product expert Natasha Wear said: “If savers are in the dark about their interest rate, it’s highly likely they’re not making the most of their money. People need to get their money moving and working harder.”
YouGov interviewed a representative sample of 2,000 adults online between January 15th and 16th.