Millions of people are losing out on hundreds of pounds each year by keeping their cash in so-called ‘zombie’ accounts – but it’s easy to stop it and start making money
An alarming 31 million Brits are unwittingly letting their hard-earned cash dwindle in ‘zombie’ savings accounts, which could be costing the average saver a hefty £560 annually when compared to more lucrative options. Personal finance expert Aaron Peake has raised the alarm that many savers may be oblivious to the fact that their money is stagnating in these zombie accounts.
Characterised by dismal interest rates, these accounts often fail to keep pace with inflation. Aaron warned: “Far too many people keep their savings tied up with their current bank without questioning the poor rates. These linked accounts often offer low interest, withdrawal limits, or tiered rates that punish you if you move money around.”
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He further advised: “If your savings rate is below inflation, which is currently 3.4%, your money is losing value. It pays to shop around and scour price comparison websites.”
Aaron also reassured savers: “You don’t have to lock your money away or sacrifice access to get better returns. Many accounts offer competitive rates with no strings attached.”
With predictions of the Bank of England slashing its base rate imminently, Aaron urges savers to take swift action, as lower base rates typically translate to reduced savings rates, reports Lancs Live.
In the battle against inflation, interest is the sole means for cash savings to maintain their worth; thus, having rates beneath the current inflation rate signifies a real-term devaluation of savings. Presently, CredAbility data indicates that a staggering £186 billion is languishing in UK accounts yielding just 1.5% interest.
In the year leading up to May 2025, the inflation rate stood at 3.4%. Given that the average saver has approximately £16,000 in their savings, this could signify a significant loss of value each year.
For instance, suppose you have £10,000 in an easy-access account yielding 1.5% interest. This would generate £240 annually in interest. However, if you were to use a top-rated easy-access account with a 5% interest rate, your earnings would increase to £800.
This equates to an additional £560 per annum simply by choosing the right account. Essentially, sticking passively with existing accounts instead of actively seeking out the best deals could be shaving hundreds off your savings.
Different accounts also offer varying interest rate ranges. Typically, easy-access accounts provide the lowest interest rates as they allow constant access to funds without penalties.
Conversely, accounts with more restrictions on withdrawals usually offer higher interest rates. These include fixed-rate accounts, notice accounts, and regular savings accounts.
Depending on your savings goals, other accounts may be a better fit and could offer a substantial boost in interest rates. MoneyFacts has outlined the average interest rates currently available across various accounts.
Average interest rates for July 2025:
- Easy access – 2.68%
- Notice account – 3.62%
- Easy access ISA – 2.92%
- Notice ISA – 3.49%
- One-year fixed bond – 4.03%
- Long-term fixed bond – 3.91%
Aaron’s top accounts offering market-leading interest rates are:
- Principality Building Society’s Six-Month Regular Saver – 7.5%
- Atom Bank’s easy access – 5% with 2.25% bonus for the first year for new customers
- Snoop’s easy access saver – 4.6%
- Plum’s 95-day notice – 4.84%
- Oxbury Bank’s 120-day notice – 4.6%
