More than a quarter in the dark about interest rates

More than a quarter in the dark about interest rates and the price impact on payments according to research by Hargreaves Lansdown.

The research found that 27% of people don’t know what interest rate they’re getting on their savings. This rises to 31% of the squeezed middle (aged 35-54), 35% of women, and 38% of renters.

Commenting on the data Sarah Coles, Head of Personal Finance, Hargreaves Lansdown said  “More than a quarter of people admit they have no idea how much interest they’re getting on their savings. The good news is all the talk about the Bank of England cutting rates over the past few months has focused people’s minds. It means the proportion who don’t know what they’re making has dropped from around a third six months ago to around a quarter today – so we’re paying more attention.

“However, there are still far too many people who don’t know where they stand, and as rates drop in the coming months, there’s a risk even more will lose track, and their savings rate will gradually be eroded.

“There’s a strong corelation between those people who tend to have less savings and those who don’t know what they’re making in interest. This includes women (at 35% compared to 19% of men), renters at 38% and people who are single after coming out of a relationship, at 36%. This may be because they don’t think they have enough savings to worry about whether they’re getting the best possible rate.

“However, there’s more than this at play, because the younger we are, the less likely we are to have significant savings, and yet only 23% of those aged 18-34 don’t know how much interest they’re making. It could be that this group see their lack of savings as a temporary situation, so they’re keen to make them work as hard as possible as they build their wealth. The other groups may find it more difficult to imagine a time when they’ll have more in the bank.”