Savers deprived of £4.3bn by 'zombie trap'

Eight in ten savings accounts are closed to new customers and therefore classed as “zombies”. Four in ten of these accounts pay 0.5pc or less. And four in ten of these pay less than 0.1pc, Which? said.

Despite such miserable rates, a third of respondents to a survey of 3,824 said they were ambivalent about switching, as rates were so poor, with three quarters claiming banks should do more to help.

There is a huge variance in rates paid on accounts – often with similar sounding names – offered by the same institution.

The Halifax “Reward Saver” account pays 1.7pc on a balance of £5,000 but its “Saver Reward” pays just 0.1pc. The AA “Internet Saver (Issue 1)” pays 1.36pc, but its “Internet Savings Account (Issue 1)” pays just 0.1pc. The Virgin Money Easy Access E-saver had five different interest rates across 10 versions, Which? said.

Anna Bowes, director of independent advice website savingschampion.co.uk, said savers were also stifled by a poor account transfer process.

“There is a lack of consistency,” she said. “All providers have their own processes, leading to a lack of confidence in simply moving money from one account to the next.”

She called for a standardised switching process, mirroring innovation in the current account market, where customers can now switch banks within seven days.

“You should simply tell your new provider details of your existing account and they should do the hard work for you,” Ms Bowes said, citing her company’s experience in running a concierge service, in which the company handles switches daily on behalf of customers.

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