Millions of savers caught out when bonus deals end
Over the past five years, almost four million savers have opened accounts paying attractive short-term bonuses and failed to move funds once the deal ends, according to research by the Fairbanking Foundation.
When savers don’t switch, their money is left sitting in accounts paying little to no interest, the charity said.
The findings revealed that 48 per cent of savers simply forgot to move their money, 20 per cent didn’t know their deal had expired, and 19 per cent were so weary of chasing short-term benefits they opted to stay put.
One in four savers who have switched out of accounts because their bonuses expired since 2010, believe banks should automatically move customers to the best possible rate when this happens, while 57 per cent said banks should do more to remind customers to move. However 54 per cent believe it is the customers’ responsibility to move their savings for a better rate.
Antony Elliott, chief executive of Fairbanking Foundation, said: “Short-term bonus deals have proved popular with savers particularly given current low rates and many do benefit from the generous bonuses on offer and transfer out once the deal is over.
“However, significant numbers are forgetting to move, which does not help customers manage their money and improve their financial well-being. Many customers get tired of chasing short-term deals and want good long-term value which also makes business sense for banks as it improves customer loyalty and retention.
“There is also a risk people are put off saving and improving their finances because of the behaviour of providers. Around 21.8 million adults are not confident they are saving enough so clearly more needs to be done to encourage saving.”