Millions of Britons could be losing out on "substantial returns" through a lack of financial awareness, it has been suggested.
The news comes as research carried out by Investec Private Bank indicated that just under a third (29 per cent) of savers do not know what rate of interest they are getting for the money they are setting aside. Meanwhile, only one in five respondents claim to know the exact rate they receive on all of their accounts. Findings from the firm also showed that some 19.3 million, or 41 per cent, save money on a regular basis.
Although five interest rate rises by the Bank of England's monetary policy committee (MPC) over the last 12 months are likely to constrain Britons' general monetary situation, such as their ability to make secured loan repayments, the financial services provider suggested that up to 10.2 million savers may not be getting the full benefit that the base rate hikes could have on their savings.
Before the MPC's decision to increase the base rate in August last year, consumers were reported to be putting away an average of 263 pounds per month. However, this has since risen to a typical deposit of 284 pounds, with 1.2 million, or six per cent, of all savers setting aside between 501 pounds and 1,000 pounds on a monthly basis.
Linda McBain, head of banking at Investec Private Bank, said: "Recent interest rate moves should be good news for savers and our research shows that people are depositing more money each month than this time last year. However, it seems that many are unaware of the rate that they are receiving on their savings accounts and as a result are potentially missing out on substantial returns over the course of a year."
The firm indicated that those savers with balances of at least 25,000 pounds could be losing out on hundreds of pounds in interest by leaving their money "languishing in lower-rate savings accounts". Investec's Savings Index revealed that between January 27th and April 27th, the average rate of interest was 2.52 per cent below the most attractive rate possible for accounts with balances of 1 pound. As a result, this was reported to potentially leave those with 25,000 pounds saved up some 630 pounds out of pocket. Consequently, Ms McBain recommended that consumers take the time to ensure that they are getting the most competitive savings product which suits their needs. "There are a number of good accounts for savers to choose from, but it is important that they look at the promises behind the headline rate," she added.
In related finance news, a recent study by R3 - the Association of Business Recovery Professionals - revealed that a rising number of Britons are struggling with debt problems. Findings from the company showed that one out of six consumers are finding themselves unable to cope with making regular repayments on credit cards and secured loans. The majority of those surveyed claimed that an increasing availability of credit and a "buy now" mindset for major purchases were the main cause of the nation's debt problems.