# UK savers losing £306 yearly by not switching accounts Interest rate gaps between banks and building societies erode savings against inflation. - **Source:** [Daily Express :: Finance Feed](https://www.express.co.uk) - **Published:** 2026-09-26 - **Topic:** [Finance](https://brifing.si/c/finance) - **Original article:** - **On Brifing:** https://brifing.si/s/481b4b91-1bbf-426c-9b5c-d81cd0d0be4b ## Rate disparity costs savers UK savers with £10,000 lose £306 annually by keeping funds in typical 1.16% accounts instead of top 4.22% building society options. Moneyfacts data shows this gap persists despite inflation running at 3.1%, meaning sub-3.1% accounts actively diminish purchasing power. The £306 difference represents nearly three months' average UK grocery spending, highlighting real-world impact. ## Big banks vs building societies Major banks pay just 1.16% on easy-access accounts while building societies average 4.22%. In 2025, this differential delivered £2.1 billion extra interest to building society customers. The gap reflects building societies' member-owned structure prioritizing customer returns over shareholder profits. Their competitive pressure forces occasional rate improvements across the sector. ## Inflation's hidden tax With CPI at 3.1%, savings below this threshold lose real value annually. A £10,000 deposit earning 1.16% becomes £10,116 nominally but only £9,806 in inflation-adjusted terms after one year. This silent erosion disproportionately affects risk-averse savers relying on cash deposits rather than investments for security. ## Behavioral barriers to switching Despite potential gains, many savers avoid switching due to perceived hassle or brand loyalty. Banks exploit this inertia through introductory bonuses that later revert to lower rates. The FCA's 2016 Current Account Switch Service reduced but didn't eliminate switching barriers, with many still overestimating the process complexity. ## Compound opportunity cost The £306 annual difference becomes £3,060 over a decade without compounding. Factoring in reinvested interest, the long-term gap widens substantially. For retirement savers, this could mean thousands less in eventual disposable income. Regular rate comparisons could mitigate this growing divergence. ## Market comparison necessity Moneyfacts analysts urge whole-market comparisons, not just checking one's current provider. Rate variations occur across account types (fixed vs easy-access) and institutions. Savers should reassess every 6-12 months as new products launch. Digital tools now automate rate tracking across dozens of providers simultaneously. ## Building societies' advantage Member-owned building societies consistently outperform banks due to different capital requirements and profit distribution models. Their average 4.22% rate reflects reinvestment of profits into member benefits rather than shareholder dividends. This structural difference creates persistent rate advantages for savers. ## Actionable savings strategy Proactive savers should: 1) benchmark rates quarterly 2) prioritize accounts beating inflation 3) consider fixed-term options for higher returns 4) automate transfers when better deals emerge. Even without additional contributions, optimized account selection can significantly enhance long-term financial resilience against economic pressures. ## Sources covering this story - https://www.express.co.uk/finance/personalfinance/2252099/10000-savings-move-money-now — --- _Summary written by Brifing from the original reporting. Copyright in the original article belongs to its publisher; read the full piece at the link above._