Here’s a surprising number: the Bank of England estimates around £300 billion is sitting in accounts earning no interest at all. According to Moneyfacts’ analysis, savers could be missing out on a combined £12 billion a year in interest if that money earned 4% instead.
If some of that money is yours, this is one of the easiest money wins there is.
Why 0% is costing you
CPI inflation was 3.1% in the 12 months to August 2026. Money earning nothing loses around 3% of its buying power over a year. On £10,000, that’s roughly £300 of value gone, just by standing still.
Meanwhile, the best easy-access accounts still pay 4%-plus. The gap between the best and worst rates is big, and big banks’ standard savings accounts are often near the bottom.
Step 1: Measure it
Open your banking apps and list every account holding cash:
| Account | Balance | Interest rate | Access |
|---|---|---|---|
| Current account | Instant | ||
| Savings account 1 | |||
| Old ISA from years ago |
Include old accounts you’ve forgotten about. Many older savings accounts and ISAs quietly drop to very low rates once an introductory bonus ends.
Step 2: Match the money to the job
| The money is for | Best home | Why |
|---|---|---|
| Emergencies | Easy-access savings or easy-access Cash ISA | Instant access matters more than the top rate |
| Goals in 1–3 years | Notice or fixed-rate account | A higher rate in exchange for less access |
| Goals 5+ years away | Consider investing, e.g. a Stocks and Shares ISA | Cash tends to lose to inflation over long periods |
Our guide on why your emergency fund should stay in cash explains the first row in detail.
Step 3: Think about tax
Most people won’t pay tax on savings interest, thanks to the Personal Savings Allowance: £1,000 of interest a year for basic-rate taxpayers and £500 for higher-rate taxpayers. If your interest might exceed that, a Cash ISA keeps it tax-free. Remember the Cash ISA limit for under-65s falls to £12,000 from April 2027.
Good to know: When moving an existing ISA, use the new provider’s transfer service rather than withdrawing the money yourself, or you could lose its tax-free status.
Step 4: Move it, safely
- Compare easy-access rates on a reputable comparison site. Look at the AER and whether the rate includes a temporary bonus.
- Check FSCS protection: up to £120,000 per person, per banking licence.
- Open the new account and move the money by bank transfer (or ISA transfer for ISAs).
- Set a reminder for when any bonus rate ends.
Step 5: Keep it working
Rates change, especially around Bank of England decisions. The next one is on 5 November 2026. Add a quick rate check to your weekly money check-in once a quarter, and move again if your rate falls behind.
The short version
Billions of pounds in UK accounts earn nothing while inflation runs at 3.1%. List your cash accounts and their rates, keep emergency money in easy access, and move savings to a competitive, FSCS-protected account, with top easy-access rates above 4%. Use the Personal Savings Allowance or a Cash ISA to keep interest tax-free, and check your rates every few months.
Common questions
How much of my savings should be in easy access?
Keep your emergency fund, typically three to six months of essential costs, in easy access. Money you won't need for a year or more can go into a notice account or fixed-rate account for a higher rate.
Do I pay tax on savings interest?
Most people don't. The Personal Savings Allowance lets basic-rate taxpayers earn £1,000 of interest a year tax-free, and higher-rate taxpayers £500. Interest in a Cash ISA is always tax-free.
Is it safe to move money to a smaller bank?
If the bank is UK-authorised and FSCS-protected, eligible deposits are covered up to £120,000 per person, per banking licence. Check the FSCS website to confirm which brands share a licence.
What about Premium Bonds?
Premium Bonds are backed by the Treasury, but instead of interest you get the chance to win prizes. Your actual return can be well below the advertised prize rate, especially with smaller holdings.
This article is general information, not personal financial advice. Your situation is your own, so check the details for yourself or speak to a regulated adviser before making big decisions. Where investments are mentioned, their value can go down as well as up.
