Brits who have thousands sat in their bank account have been given a warning. Yorkshire Building Society has said that over 12 million current accounts are earning 1% or less in interest on balances above £5,001.

Earlier this year, research estimated that a staggering £526 billion is currently sitting idle in bank accounts, earning no interest. This means that approximately 29 million people miss out on £20 billion annually in interest by leaving money languishing in current accounts and not transferring it to high-interest savings accounts. For savers who actively seek higher returns, the difference can be significant. For example, if £5,000 were placed in the best easy-access savings account paying 4.76% interest, it could generate around £243 in interest. In contrast, the average current account balance of £2,067 would only earn around £175.56 if placed in the same high-interest account. One in three people has £5,000 sitting in their current account, while the average current account balance is £2,067. 

Derek Sprawling, of Paragon Bank, says: “High street banks are offering little to no interest on savings while making it unnecessarily difficult to access better alternatives, resulting in the rise of ‘current account coasters’.”

The issue goes beyond just poor savings rates—a more fundamental challenge appears to be apathy among savers. Many individuals aren’t actively managing their savings or seeking out the best accounts to maximise their money’s growth potential, the Mirror reports.

According to Paragon, one in 10 people admits they leave money in their current accounts simply because they haven’t yet got around to moving it to a higher-paying savings account. Another 11% report that they have no specific reason for not transferring their funds to a high-interest account.

Just over 20% of people say they keep money in their current accounts as a rainy-day fund, suggesting that for some, the convenience of easily accessible funds outweighs the potential for better interest returns.

Speaking about spending, Tina Hughes, director of savings at Yorkshire Building Society, said: “With household budgets under pressure and financial stress rising, it’s clear many are feeling the pinch. 

“Yet millions are still missing out on easy wins – like earning interest on their savings. For many, that extra income could have easily covered the cost of Christmas, but for those without savings to fall back on, starting a regular saver now could mean a stress-free festive season next year – without relying on credit.” 

The proportion of people planning to splurge this Christmas has decreased sharply compared to last year. Households are expected to spend an average of £596 this year, down from £774 in 2024.