Pensioners are missing out on hundreds of pounds because of bad saving habits, UK households have been warned. More than a quarter of retired Britons have never switched bank accounts – meaning the OAPs could be missing out on cash through much better interest rates.
A survey by Hargreaves Lansdown found 29 per cent of pensioners have never switched provider despite the recent hikes in interest rates. Sarah Coles, head of personal finance at Hargreaves Lansdown: “Emergency savings are a vital lifeline for retirees, so it’s brilliant that the vast majority of people in retirement have done all the hard work of building a savings safety net.
“Unfortunately, there’s every chance this money is languishing neglected in miserable savings account, because significant numbers of retirees admit to alarming savings habits.” 37 per cent retirees have some of their savings in a current account, which is more than double the proportion of non-retired people who do, at 14 per cent.
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Ms Coles said: “There’s a risk people are keeping it here ‘just in case’ – instead of getting a better rate in an easy access savings account. The problem is that in the vast majority of cases, they’re getting little or no interest on their money, and by removing any friction to spending their savings, there’s a risk it will disappear without them ever really knowing where it went.”
She said: “When we asked savers why they won’t switch, retired people were more likely to say they already had the best rate (34 per cent compared to 25 per cent of those who are not retired). However, given so many of them haven’t moved accounts recently, it may simply be that this is the best rate at their bank, or the best they have seen on the high street.”
Ms Coles explained: “Retired people are more likely than their working counterparts to focus on whether their money is secure and whether they trust their bank. This could mean they distrust newer and online banks, and don’t realise they offer the same protections for customers as the high street giants.”
