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Big bank loyalty leaves savers almost £300 worse off

ended 11. February 2026

Savers have been urged to consider lesser-known providers to avoid missing out on hundreds of pounds in interest, following new analysis from Moneyfacts. Please read the below and send across your thoughts ASAP as we are writing this story NOW.

  • On average the biggest banks offer just 1.19% on their flexible easy access accounts*, compared to 1.37% last year. The average easy access rate sits at 2.42%.
  • The top challenger banks offer 4.12% on average across their easy access accounts**.
  • A saver with £10,000 in an easy access account earning a typical big bank rate could earn £293 more a year by switching to a typical challenger bank rate.

 Caitlyn Eastell, Personal Finance Analyst at Moneyfactscompare.co.uk, said:

 “Loyalty to big banks can leave savers hundreds of pounds worse off, an amount that many may struggle to spare. With savings rates expected to drop further from the peaks seen over the past few years, staying in a low-paying account may amplify the cost, making it harder for savers to reach their financial goals. Switching to a lesser-known challenger bank could help offset this, as they often offer more attractive rates. By operating digitally with lower overhead costs, challenger banks can pass on cost savings to customers, giving them the opportunity to improve their returns.

“Someone with £10,000 in a typical big bank easy access account could earn just £119 in a year, compared to the £412 in a typical top challenger bank easy-access account. The incentive to switch quickly becomes clear, but even small differences in interest rates can make a big impact over time.

“Savers don’t have to take on additional risk by switching to a smaller or digital provider because many challenger banks are also covered by the Financial Services Compensation Scheme (FSCS), which protects deposits up to £120,000.

“However, savers should remain alert. Challenger banks often lead the market with headline rates that include limited-time bonuses, sometimes exceeding 2%. Bonus rates reward active switchers, allowing them to access the best rates and boosted returns in the short-term, but they also drive competition between providers, pushing banks to offer better deals all-round. Once bonuses expire, rates can fall sharply, so passive savers risk being left behind and those seeking stability may find these less suitable for long-term planning.”

5 responses from the Newspage community

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Riz MalikVerified
Independent Financial Adviser at R3 Wealth
Is the reason people stay with poor savings accounts really loyalty or is it that most don’t want to deal with the admin of moving for better rates? Loyalty is a synonym of apathy. Fortunately, there are now platforms to make switching easier to ensure your bank is not taking advantage of your loyalty or apathy. In 2026, switching accounts is extremely easy so do not delay.
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Rob MansfieldVerified
Independent Financial Advisor at Rootes Wealth Management
Saving cash can be convenient but it still requires work and keeping on top of rates. Making sure your money is working for you as hard as it can is really important. Banks will take advantage of those not keeping up to date with rates. There are lots of different institutions you can save with but make sure they're covered by the Financial Services Compensation Scheme and be aware of whether they're sharing a licence with another brand or have their own.
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Philly PonniahVerified
Chartered Wealth Manager and Financial Coach at Philly Financial
Big banks are relying on inertia, full stop. Paying 1.19% when challengers average over 4% is a huge loyalty penalty. In a year where rates are drifting down, staying put will cost you. Easy access should still work hard, and switching takes minutes online. The key point is that you do not need to take extra risk to earn more. As long as the bank is FSCS-protected, your money has the same safety net up to the limit. But savers need to stay alert as many top rates include short-term bonuses. When those end, the rate can reduce fast. The winners are active savers who review their accounts at least once a year and move if needed. Choosing an account that pays interest monthly also gives you flexibility, as you can walk away with the interest earned if you switch mid-year.
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Samuel Mather-HolgateVerified
Managing Director & IFA at Mather and Murray Financial
With rates likely headed south based on last week's Bank of England murmurings from the Bank of England, savers need to bring their A-game in 2026. Be active, search around for the best deals and do not feel you need to be loyal to your bank just because you have been with them all your life.
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Scott GallacherVerified
Director at Rowley Turton
Loyalty rarely pays in banking. The biggest high street banks are offering little more than 1% on easy access accounts, while challenger banks pay over 4%.

This disparity is difficult to justify, particularly as many of the same big banks continue to close branches, weakening the argument that lower rates reflect materially higher costs or superior face-to-face service.

The gap persists largely because banks rely on customer inertia. The burden falls heaviest on older and less financially confident savers who may be less inclined or able to switch.

On £10,000 of savings, misplaced loyalty could be costing up to £300 a year in lost interest. MPs and regulators have known about the issue for years, yet the pricing gap remains. Until it narrows meaningfully, millions will continue to earn far less than they could elsewhere.