How big banks are failing savers - and what you can do about it

Posted by Akoni Hub
Posted on January 24, 2023 Leave a comment

How savers can get better returns away from high street banks

It’s fair to say our shopping habits have changed significantly over the past few years. 

Long before the Covid pandemic’s devastating impact on the retail sector, which saw the demise of much-loved brands such as Debenhams and Mothercare, the beloved British high street was already under threat, thanks to the rise of the internet. 

As the cost of living crisis continues to bite, British consumers cut their shopping by the most in the key month of December in at least 25 years .

But while shoppers have altered where and how much they buy over the years, the same can’t be said of savers. 

Britain’s savers remain unwaveringly loyal to high street banks even though they typically pay the worst rates.

Why are we so devoted to these big-name brands? For many reasons, it seems. Apathy, inertia, the misplaced belief that loyalty pays (when it rarely, if ever, does). 

But the reality is there’s no reason why we should stick with a bank that’s not only not rewarding us for our dedication, but more often than not, penalising us. 

Interest rates are rising  

It’s important to remember that we’re in a rising interest rate environment. After decades of perennially low rates, the Bank of England has raised the base rate nine times between December 2021 and December 2022, in a bid to tackle inflation and soaring household and energy bills. 

In theory, that should mean higher savings rates for customers. In reality, that’s not guaranteed. In fact, some major banks have yet to pass a single penny onto savers.

There’s no excuse for this behaviour. 

The cost of living crisis we’re currently experiencing means British savers are saving less following a period of burgeoning saving during the pandemic.

That means banks are now chasing a smaller pool of savers and, therefore, they should be offering competitive rates - yet most of the big banks aren’t.

Fortunately, we no longer have to rely on big-name brands to house our savings. 

Challenger banks pay better rates 

Several years ago, high street banks were all we had. Today, however, thanks to the emergence of multiple challengers, there’s no shortage of choice. 

And these newer names often pay the best rates on the market in an attempt to attract new customers.

Time and time again, challenger banks top the best buy tables by offering headline-grabbing, market-leading rates. 

If you’re concerned about switching your savings to a bank you've never heard of, there’s no need to worry. Challenger banks need to abide by the same regulations as traditional banks and the vast majority are protected by the Financial Services Compensation Scheme (FSCS), which means up to £85,000 of customer money is covered if the bank fails. 

Switching is easy 

Moving your money to a better deal can be laborious and time consuming. Finding the best deal can take more time.

One solution is to use a deposit aggregator, such as Akoni, which takes the hassle out of finding more competitive savings accounts. 

All you have to do is select the type of account you want - instant access, notice or term - and the Akoni cash planner will find the deals for you. With one application to Akoni you can then seamlessly open as many accounts with their Panel Banks as you’d like.

You’re able to monitor and switch deals on your personalised dashboard and you can even receive prompts and alerts when new products or rates launch. 

Akoni has 20 banking partners, including 13 challenger banks and 2 building societies. So the providers on our platform are more likely to pay market-leading rates. In addition, all of our partners provide full FSCS protection (or the equivalent if outside the UK), so as long as you don’t have more than £85,000 with one institution, your money is 100% safe.

It should take just five minutes to set up an Akoni account. Once it’s approved, you fund the account, select the deals that meet your needs and we do the rest. No long application forms. Minimal paperwork. Better deals for you.

Ready to get the best savings rates? Sign up now.

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