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UK financial watchdog urging savers to switch – how to get better savings rates?

The Financial Conduct Authority (FCA) recently launched a campaign to highlight the benefits of switching. Here’s an easy way savers could get more from their money.
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Important information - This article isn’t personal advice. If you’re not sure whether an investment is right for you please seek advice. If you choose to invest the value of your investment will rise and fall, so you could get back less than you put in.

Armed with social media, radio ads, and savings calculators – the Financial Conduct Authority (FCA) hopes to show that better rates make a real difference to your returns, without much effort.

It comes as little more than half of savers said they’d switched or were considering switching their savings accounts.

This follows the FCAs December crackdown on banks who are too slow to pass on base high rates to their customers.

Yet, around two thirds also said they would consider switching. So why haven’t they?

This article isn’t personal advice. If you’re not sure whether an investment is right for you, please seek advice. Inflation reduces the future spending power of money.

2 reasons for not switching



Our study* in October revealed around a quarter (27%) weren’t moving because they trusted their bank.

People are generally less comfortable with newer or smaller banks. The thought of possibly losing your savings when a bank collapses is a driver of inaction.

But all UK banks and building societies are covered by the Financial Services Compensation Scheme (FSCS) protection if they are authorised by the FCA and Prudential Regulation Authority (PRA).

The limit of £85,000 of eligible deposits is per banking licence. If you have money with different banks and building societies who share the same licence, you’ll only have a total of £85,000 protection through the FSCS.


Switching is a hassle

Almost half surveyed didn’t want the hassle of switching or didn’t think it was worth it.

Everyone’s different, but an extra £500 a year would turn most people’s heads.

And by switching from a high street bank to a competitive rate, that’s how much more you could earn.

For example, right now the average easy-access rate at a high street bank is 1.71%. Competitive easy-access rates will get you over 4.70%.

With a pot of £20,000, that’s a difference of £598 extra. If you multiply that over a few years, it’s over £1,100 extra.

The rates of easy access accounts are variable, so these rates could change over time. The actual return, and any difference, will depend on the rates applying at the time.

Remember, withdrawals from easy-access accounts can take one working day.

*HL survey conducted by Opinium, 2,000 respondents in October 2023

An easier way to boost your returns

You could spend your time watching the rate tables and move your money into the best rate.

But the bank at the top spot is always changing. Sometimes an account offering the best rate one week, offers a less than competitive rate a few weeks later.

Opening new accounts to keep your money competitive can be tedious and time consuming.

That’s where savings platforms, like Active Savings, come into play.

They act like a marketplace for competitive rates. So instead of watching rates tables, opening new accounts, and juggling logins – you can login and pick the rate you like in one place.

That saves you time, but also lets you take full advantage of interest rates from a range of banks.

And if you’re worried about paying further tax on your savings, you could also think about a Cash ISA. Unlike other Cash ISAs, with HL you access rates from a range of banks.

Save in a variety of products, all through one online account. You won’t find that level of choice anywhere else.

Products can be added or withdrawn at any time, so check our website for the latest. ISA and tax rules can change and their benefits depend on your personal circumstances.

This website is issued by Hargreaves Lansdown Asset Management Limited (company number 1896481), which is authorised and regulated by the Financial Conduct Authority with firm reference 115248.

The Active Savings service is provided by Hargreaves Lansdown Savings Limited (company number 8355960). Hargreaves Lansdown Savings Limited is authorised and regulated by the Financial Conduct Authority (firm reference number 915119). Hargreaves Lansdown Savings Limited is authorised by the Financial Conduct Authority under the Electronic Money Regulations 2011 with firm reference 901007 for the issuing of electronic money. Hargreaves Lansdown Asset Management Limited and Hargreaves Lansdown Savings Limited are subsidiaries of Hargreaves Lansdown plc (company number 2122142).

Don’t miss the latest about your finances

From the 2024 Spring Budget changes to what affects your savings, there’s plenty to talk about.

To make sure you don’t miss out on the latest about your money, sign up to our new ‘Monday Money Matters’ personal finance newsletter.

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Written by
Guy James
Guy James
Personal Finance Writer

Guy is a savings specialist, passionate about encouraging people to get to grips with their cash. An integral part of our Active Savings team, he aims to help as many people as possible secure their financial safety net, and make more of their cash.

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Article history
Published: 12th March 2024