Martin Lewis has issued a warning to people with savings in a bank.
The founder of Money Saving Expert was speaking on a live broadcast on ITV’s Money Show.
He said that if you have savings in a low-paying interest bank account then it is time to “ditch and switch”.
Martin spoke to guest Joanne who was keen to find out about the best savings accounts for her money right now.
Joanne had put a “good whack” of her savings in a three-year fixed account which ended last year, the Mirror reports.
However, on maturity, the bank then told her that “because of Brexit ” she would only get 0.2% interest.
She was advised to “leave it there and see what happens.”
“That’s just not true,” Martin said. “There are a load of accounts out there that are easy access that pay 1.5%. They shouldn’t just tell you to leave it there and see what happens when there are so many options on the market.
“On the amount of money you’ve got, they’ve taken a couple of grand off you in interest that you could have earned elsewhere,” he said.
“My message is this: if you haven’t been given good service by your bank, go and give someone else a go. When you get bad service and bad information that means you lose out on money, don’t give them your custom and don’t let them keep your custom.”
On returning to the studio and the live audience, Lewis issued an “important warning” for those with money in savings accounts.
“In the last week or so, we saw the top payer Marcus Bank drop its interest rate from 1.5% to 1.45% and straight afterwards the other top payer, Synergy Bank did exactly same thing,” Lewis explained.
The problem is that long term predictions of interest rates have plummeted as the UK faces uncertainty.
“I’m worried we’re at the start of what I’d call a race to the bottom,” said Lewis. “Instead of companies competing to be at the top of the best buy tables, they’re starting to withdraw accounts like they did in 2016 because they don’t want all that money flooding in, it’s just too expensive for them to do.
“The world economy is not in a great state. The UK is facing severe uncertainty and that means the city’s long term predictions of interests rates have dropped and the rates we get to save at tend to be based on those long-term predictions.
“Anyone with savings right now should be asking themselves: is my money in the right place?
“The bog-standard accounts, easy-access Marcus and Synergy are 1.45%. If you’re getting anything less like that you’re not earning enough. Ditch and switch.
“There is also Al Rayan bank which pays 1.6% easy access. It’s actually a Sharia account which means it follows Islamic law so interest is prohibited.
“Instead of an interest rate you get what is called an expected profit rate – no UK Sharia bank has ever not paid that out so that’s an interesting option.”
Lewis also advised Britons to think about fixing. “Even though fixed rates have dropped, there is a potential they’re going to drop a lot further,” he predicted.
You can take a look at our top fixed rate accounts here.
“If you want certainty, the top one year fix is Arbuthnot bank which pays 1.86% on a minimum £10,000. If you haven’t got that much, there’s Metro bank at 1.85% on a minimum £1,000.
“If you want longer – two years – there’s First Save which pays 2%. I wouldn’t necessarily fix longer than that with what’s happening with the economy, it’s so uncertain.”
Lewis concluded: “I cannot make it plainer. If you have savings, this is one of those pivotal times to make sure you are earning enough – because the opportunities for doing that – potentially – look like they’re disappearing.”