Are older savers missing out on the best bank rates?

Millions of people who don't yet bank online could be locked out of the best deals.

Research from financial advice website Moneyfacts has found that a third of easy access deals (34%) offer no branch access.

Savers who have yet to get online, particularly older savers, could be missing out on the best deals as a result.

According to data from the ONS, 4.5 million adults in the UK had still never used the internet by 2018. Of this, 2.6 million were aged over 75. 

Based on someone with £10,000 to put away, the best easy access account rate is currently offered by ICICI Bank UK at 1.55%, which requires customers to apply online and does not offer any branch access.

Meanwhile, the best account with branch access comes from Yorkshire Building Society and pays 1.41%. In comparison, SAGA’s telephone access saver, designed for the over 50s, is available nationally but pays just 0.70%.

The research revealed that the percentage of easy access deals without branch access has been steadily increasing over the past five years.

In February 2014, 29% of easy access accounts did not have branch access, rising to 34% in February 2019.

Over the same time, the percentage of easy access deals which can be managed online has also increased, going up from 53% in February 2014 to 62% in February 2019.

Rachel Springall, finance expert at Moneyfacts, says: “Those savers who have yet to jump in on the internet craze may be disappointed to find out that a third of the easy access market provides no branch access.

“As it stands, savers who have yet to get online will be missing out on the best interest returns on easy access accounts, which is bad news for those silver savers who may rely on their savings income – inevitably leaving them feeling left behind.”

Bank closures

There is growing concern that increasing number of bank branch closures could be leaving people without access to cash, hitting the elderly and the disabled particularly hard.

Whilst there has been a shift online and to mobile, for many people this is not possible and they are unable to travel to another branch.

Ms Springall says: “As savers may have already noticed, some of the biggest bank brands are in the process of closing hundreds of branches, including Lloyds Banking Group, RBS Group and even Santander.

“With thousands of branches set to close, and the percentage of deals offering branch access decreasing, this may pose a problem for those who rely on them to manage their money.

"These growing signals of a changing landscape on the high street are steering more consumers to bank online, regardless of their age or circumstances.”

Bank branch closures have increased in recent years and are shutting at a rate of 10 a week.

Last month, Santander announced plans to axe nearly a quarter of its branch network as a result of more customers moving online.

According to the bank, the number of transactions carried out in branches has fallen by 23% over the past three years, while digital transactions have grown by 99% over the same period.

Caroline Abrahams, charity director at Age UK, says: “The seismic shift towards online banking in recent years means that the four million or so older people who are not online are effectively locked out of the best interest rates, while people who are not in a position to switch regularly often find themselves on ‘off-sale’ products with dwindling returns.

"Banks and other financial providers must stop penalising people who have done their best to save, and ensure that good deals remain accessible to those savers without online access.”

This article was originally written by our sister publication Moneywise

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