Passbook savers 'missing out'
People saving for retirement in the UK with an account that entails the use of a passbook are missing out on potential returns, according to new research.
Figures compiled by MoneyExpert have shown that savers who insist on having a passbook with their accounts are losing out on the possibility of accessing more competitive interest rates.
In fact, the average savings account with a passbook offers around 0.5 per cent less interest on an annual basis for deposits over £1,000 than those that do not, the recent research discovered.
Furthermore, a majority of savings accounts that involve the use of a passbook offer interest at levels below the Bank of England base rate, which was reduced earlier this month.
Sean Gardner, chief executive of MoneyExpert, said: "Many savers like and value the security and certainty offered by a passbook with their savings account.
"However, there is a cost for banks and building societies in providing passbooks and it is savers who are paying the price."
Meanwhile, Moneyfacts suggested recently that the competition among financial services firms to attract new customers will see the rates of interest on offer in the UK increase in weeks to come.
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