A warning has been issued to UK households with "average" bank balances. Millions of UK households are being urged to review the interest rates on their bank accounts, due to the risk of losing substantial amounts of money in potential interest, reports Birmingham Live.

Kate Steere, personal finance expert at Finder, stated: "If you were earning the new NatWest or RBS rate of 1.15% AER with the amount we found the average Brit has saved (£16,067), you'd get just £185 in interest over the course of a year.

"There are much more competitive rates available. For example, if you opened a Plum Cash ISA with a rate of 4.98% AER (including a 12-month 1.69% bonus) using the £16,000, you could earn up to just over £800 in interest over the year (dependent on any rate changes) - a potential £600 boost to your savings."

Ms Steere advised: "It's essential to act fast if you want to get the most from your savings. The best easy-access accounts are still paying up to 5% on smaller balances, while one-year fixed-rate deals offer up to 4.6%."

Ms Steere added: "Variable rates are subject to change, so if you are still looking to use your 2025/26 ISA allowance - and you can afford to lock your cash away - now is also a great time to seek out a good deal on a fixed-rate ISA."

"Utilising the full tax-free allowance is more crucial than ever with reports that Rachel Reeves will announce a reduction to the Cash ISA limit in her Mansion House speech next week. Currently, Cynergy Bank is offering 4.32% AER for a one-year fix."

remarked Rachel Springall, Finance Expert at Moneyfactscompare.co.uk. "Savers looking to secure a guaranteed return on their cash will be delighted to see some much-welcomed competition across fixed rate bonds and ISAs in the top rate tables over the past week. Several challenger banks made rate hikes which has led to a new market-leading rates, across varying terms.

"Picking the right savings account does come down to someone's individual circumstances, and aside from chasing the top rates, it's important to ensure they stay within their Personal Savings Allowance (PSA) and take advantage of their ISA allowance to protect their hard-earned cash from tax.

"Loyalty does not pay, so it is essential for savers to proactively review and switch their savings pots. Some of the best rates on the market come from challenger banks and mutuals, which should not be overlooked. Taking time out to check any old pots against the latest competition is wise, as is signing up to rate alerts or newsletters to keep in the know."

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