Millions of households across the UK are missing out on significant extra income by leaving substantial sums in low-paying bank accounts, according to a stark new warning.
The Cost of Inaction on Savings
Analysis from Yorkshire Building Society and data firm CACI reveals a concerning trend. It indicates that more than 12 million current accounts in Britain are paying interest of 1% or less on balances above £5,001.
The average balance held in these underperforming accounts is a substantial £23,700. The research suggests that by simply moving this money from non-interest or low-interest current accounts into better-paying savings products, households could have gained nearly £1,000 in extra income this year alone.
Festive Financial Strain Could Have Been Avoided
Tina Hughes, Director of Savings at Yorkshire Building Society, linked the findings directly to the pressure many feel during the holiday season. "Christmas is usually a time of celebration, but this year many households are cutting back as budgets tighten," she said.
"The number of people planning to spend over £1,000 has fallen dramatically. With household budgets under pressure and financial stress rising, it's clear many are feeling the pinch."
She emphasised that for many, that potential extra interest income "could have easily covered the cost of Christmas." For those without a savings buffer, Hughes advised that "starting a regular saver now could mean a stress-free festive season next year – without relying on credit."
A Shift in Consumer Behaviour
The data underscores a dramatic change in spending intentions. The proportion of people planning to spend over £1,000 during the festive period has plummeted from 51% in 2024 to just 15% this year.
Financial anxiety is clearly rising. Over half of respondents (55%) admit to feeling stressed about their finances, marking a 10% increase since 2023. Furthermore, almost a quarter (24%) plan to use credit to cover their Christmas costs.
A Brighter Picture for Savvy Savers
The report also highlights a success story for proactive consumers. More than 13,000 people who opened a Yorkshire Building Society Christmas Regular Saver account in January 2025 saw their plans mature at the end of October.
This account allowed monthly deposits of between £1 and £150, resulting in average balances of £1,070 by the time it matured, providing a dedicated pot for festive spending.
The central message from the analysis is clear: with millions of pounds sitting in accounts earning minimal returns, a simple review and switch could provide a vital financial boost for households across the country.
