Sticking with your bank out of habit could be costing you more than you think. New analysis from LHV Bank reveals that UK savers who leave their money in low-rate easy access accounts could miss out on £1,661 in interest over five years — roughly £28 a month in lost returns.
The research compares a typical high street easy access rate of 2.54% against LHV's rate of 4.00% AER on balances up to £100,000. For a £20,000 pot, the difference is stark:
At 2.54% → balance grows to £22,672 after 5 years
At 4.00% → balance grows to £24,333 after 5 years
Gap: £1,661 — and it widens every year due to compounding
The "loyalty penalty" is far from trivial. Around 8 million UK savers currently earn 1% or less, and 70% of adults believe all banks are basically the same — a misconception that's quietly eroding their savings.
Inflation adds further pressure: if price growth outpaces returns, the real value of cash savings shrinks regardless of the nominal rate.
Kris Brewster, Interim CEO of LHV Bank, said: "Many savers assume their bank will treat them fairly if they stay loyal. In practice, the numbers show the opposite is true... UK savers need clear and simple accounts with strong rates that last, rather than short-term offers with gimmicks that drop away after a few months."