Savers have been left baffled as to what level of interest they are earning following the succession of base rate cuts.

As the next base rate decision approaches, a study from uSwitch.com has indicated that the abundance of base rate cuts over recent months has left consumers baffled as to what level of interest they are earning with their main savings provider.

More than 20 million savers admit they have no idea what level of interest they currently earn on their main account, as the past six base rate cuts in six months have seen their savings interest rates diminish.

The report, polling UK adults, has also revealed that 20.5 million savers cannot recall what savings interest rate they were earning when they opened their main account.

While no-notice savings accounts with banks currently pay an average interest rate of 1.01 per cent and building societies pay an even lower average of 0.76 per cent, more than 2.5 million savers believe their provider hasn't provided them with enough information about how base rate cuts affect their savings rates, and that is why they do not know their current savings rates.  

Similarly, 5.5 million people say they have simply lost track of how the Bank of England base rate cuts have impacted their current interest rate.

Rumina Hassam, personal finance expert at uSwitch.com, says, ‘Over the past six months the Bank of England base rate has been cut six times, from five per cent to an all-time low of 0.5 per cent, and there have been concerns over a savers' revolt.  

‘This has been further fuelled by figures indicating that savers have withdrawn £2.3 billion from banks in January. It is little wonder therefore that more than 22 million savers have no idea what level of interest they currently earn on their main account.’

However, it seems that the message may be sinking in that savers need to take action to get the best interest rates for their deposits.  A quarter of savers have switched their savings account in the past year, while six million savers have switched providers in the last month alone to get a better rate.

Hassam concludes, ‘Savings providers' are duty bound to let their customers know whenever the interest rate on their savings account changes. However, this report indicates that providers may not be doing enough to let their customers know in a clear and transparent way when their interest rates change and for what reason.  

‘With the Bank of England base rate already at a historic low, and no one sure whether it will decrease again this week, it is more vital than ever that providers update savers if their interest rate declines at any stage.’

Further reading:

Rates under pressure
Saving for the future