People stuck in financial habits ‘missing out on better returns’

Many Brits are missing out on better financial returns because they’re sticking with their current arrangements year after year.

According to savings app Spring, lots of people aren’t reviewing where they keep their money, so they’re overlooking savings accounts with better interest rates.

In fact, figures showed that 51% are sticking with their current financial habits and arrangements even though better options could be available.

When asked why, 22% said it’s because they’re worried they’ll make the wrong decision and regret it later.

Meanwhile, 15% said they feel overwhelmed by the choices on offer and 13% said they find it hard to compare different options.

A further 13% stated that they didn’t understand how changing bank accounts would help them in the long run.

What should I do if I’m thinking of switching bank accounts?

If you’re considering moving to a different bank account, it’s worth weighing up the pros and cons before making any firm decision.

Some banks will offer incentives, such as an initial payment for switching, cashback, low overdraft fees, or discounts on retail and leisure activities. 

But some will also come with fees or require you to pay in a certain amount each month to qualify for the features they offer, or you might need to have a certain credit score to be eligible.

You should also bear in mind that a credit check will be carried out for each application you make. 

Lots of applications in a short space of time may sound alarm bells for potential lenders. 

So if you need to borrow money in the near future, perhaps for a mortgage, it’s probably worth avoiding switching current accounts for six months before you apply.

“As with any current account, it’s important consumers assess the overall package of any deal before they commit, such as any fees or incentives,” said Derek Sprawling, managing director of savings at Spring.

“However, a free cash boost may be the ultimate sweetener for cash-strapped consumers who want to avoid dipping into their overdraft.”

Mr Sprawling added that even though it is “simple to earn significantly better returns”, many people appear to be putting their financial wellbeing at “the bottom of their admin list”.