UK consumers are more likely to open a new savings account with an online-only provider than a traditional high-street lender.

Research from SmartSave, run by Chetwood Financial, revealed that 34% of those surveyed have opened a savings account with a new bank in the last two years. 55% of those who changed providers opted to ditch the high street, moving their savings to an online-only provider.

69% of respondents moved to a new bank because it was offering higher interest rates. Some 55% say their previous bank was not passing on higher interest rates to savers despite the base rate hikes.

70% of those who switched providers did so after researching the best buy tables online. Another 62% used a comparison site or online savings platform to discover the best deal.

Less than a quarter (23%) of those who switched providers found the process of opening a new savings account with a different bank difficult.

The savings loyalty penalty

Andy Mielczarek, Founder and CEO of SmartSave, said:“It is clear from this data that consumers are favouring digital solutions to get the most out of their savings. That means going online to find the best available deals or favouring digital banks when they decide to make a switch.

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By GlobalData

“Many big banks are failing to pass better rates onto customers despite the Bank of England’s base rate hikes. And rightly they are coming under fire for these failings. It’s not a surprise that consumers are looking beyond the high street. Indeed, the high inflation environment has put pressure on consumers to make the most of what they’ve got. Our research highlights that many of those with savings are assessing the best options.

“But only 33% have opened new accounts in the past two years, and this number could be higher. Savers today need to be aware of the loyalty penalty that staying with the same savings products and providers could enact on them. Their best bet is to be proactive in establishing the rates they are achieving and then searching out possible alternatives.”