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Savers urged to avoid low interest accounts

Research from the Post Office has revealed that millions of savers are unaware of how much interest they are receiving on their accounts.

In fact, the latest figures have shown that British savers are missing out on close to £8 billion annually by failing to put their cash in the most competitive savings accounts.

At a time when inflation is rising, food and energy prices are higher than ever and credit harder to come by, the Post Office is urging savers whose cash is languishing in low rate accounts to find a home for their money where it will work as hard as possible for them.

Richard Norman, director of savings at the Post Office, said: “It’s time savers started to take care of their savings by choosing a home for them wisely – especially in the current economic downturn.

“There are hundreds of poor-paying accounts, so people need to avoid them. “If you don’t know what interest you are currently earning, contact your provider. If it is paying a low rate and you want it to earn more then move it.

“Although it might be tough to put money away at the moment, it is more important than ever to make sure your existing savings work as hard as they can for you.”

Savers with an average amount of £5,000 are letting up to £188 a year slip through their fingers by keeping their money in accounts paying interest below the Bank of England base rate.

Many people aren't paying enough attention to their savings and three in 10 have no idea what rate their account pays, research from the Post Office reveals.

Some £26.4bn was put into savings accounts in 2007, but much of that has not been accumulating as much interest as it could in higher-rate accounts.