Millions of Britons are missing out on higher interest rates for their Cash ISAs, potentially losing hundreds of pounds in extra income each year.
Analysis from Yorkshire Building Society and CACI reveals that 6.9 million instant access ISAs are earning just 1.5 per cent interest or less.
This comes despite a period of improved savings rates across the market, suggesting many savers are failing to shop around for better deals.
The findings highlight a significant gap between the best rates available and what many Britons are actually receiving on their tax-free savings.
Experts suggest reviewing ISA accounts could lead to substantial financial benefits for affected savers.
The average balance in these low-interest accounts stands at approximately £6,700 - a significant sum which could be earning better returns.
Despite increased awareness about shopping for better rates, the amount held in low-paying ISA accounts has actually grown by £3 billion over the past year.
This trend suggests many savers are either unaware of better options or haven't taken time to switch their funds.
LATEST CASH ISA UPDATES:
For the average saver with £6,700, the difference between a 1.5 per cent rate and more competitive offers could amount to hundreds of pounds in lost interest every year.
And Harry Walker, senior savings manager at Yorkshire Building Society, expressed surprise at the findings.
"It's surprising to see such a large amount still sitting in low-paying ISA accounts after a period of significant increases to savings interest in the last two years," he said.
"This data follows from our analysis earlier in the year, which called for consumers to take time to review their finances," he added.
It comes as the Chancellor has confirmed cash ISAs will be reformed to push savers to invest their money instead.
Rachel Reeves confirmed to the Treasury Select Committee just days ago that Labour would be pushing through a series of reforms - though she counselled that she "did not want to rush it".
"We want to make sure that we understand people's needs, but I do think that reform would be worthwhile - and that's what we're looking at at the moment," she said.
Find Out More...
Analysis from Yorkshire Building Society and CACI reveals that 6.9 million instant access ISAs are earning just 1.5 per cent interest or less.
This comes despite a period of improved savings rates across the market, suggesting many savers are failing to shop around for better deals.
The findings highlight a significant gap between the best rates available and what many Britons are actually receiving on their tax-free savings.
Experts suggest reviewing ISA accounts could lead to substantial financial benefits for affected savers.
The average balance in these low-interest accounts stands at approximately £6,700 - a significant sum which could be earning better returns.
Despite increased awareness about shopping for better rates, the amount held in low-paying ISA accounts has actually grown by £3 billion over the past year.
This trend suggests many savers are either unaware of better options or haven't taken time to switch their funds.
LATEST CASH ISA UPDATES:
- Pressure mounts to SCRAP Cash and Shares ISAs as Reeves eyes major tax-free savings reform
- Rachel Reeves pledges 'long overdue' ISA reform as cut to tax free allowance 'still on the cards'
- Chancellor warned against 'terrible idea' to slash tax break used by eight million Britons
For the average saver with £6,700, the difference between a 1.5 per cent rate and more competitive offers could amount to hundreds of pounds in lost interest every year.
And Harry Walker, senior savings manager at Yorkshire Building Society, expressed surprise at the findings.
"It's surprising to see such a large amount still sitting in low-paying ISA accounts after a period of significant increases to savings interest in the last two years," he said.
"This data follows from our analysis earlier in the year, which called for consumers to take time to review their finances," he added.
It comes as the Chancellor has confirmed cash ISAs will be reformed to push savers to invest their money instead.
Rachel Reeves confirmed to the Treasury Select Committee just days ago that Labour would be pushing through a series of reforms - though she counselled that she "did not want to rush it".
"We want to make sure that we understand people's needs, but I do think that reform would be worthwhile - and that's what we're looking at at the moment," she said.
Find Out More...