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Charges on withdrawals may be wiping out savings interest.
Over £165 billion is currently held in savings accounts that penalise customers for making withdrawals, new research shows. According to a survey by Sainsbury's Finance, some 13.26 million savers have money tied up in such accounts.
The financial services provider found that around one-quarter of the top 50 instant access/easy savings accounts available on the market impose restrictions on the number of withdrawals their customers can make, while eight percent levy charges for taking out money, potentially wiping out any interest earned over the month.
Helen Cook, head of savings at Sainsbury's Finance, said: "Given the rising cost of living and economic difficulties, it may be worth moving your savings to an account without penalties if you think you may have to access your savings."
The research shows that over the past 12 months, almost 2.5 million people have withdrawn between £1,000 and £10,000 from accounts that carry withdrawal restrictions, while 4.7 million have taken out up to £1,000.
These withdrawals are perhaps being made to pay off debts, as Lloyds TSB found that 37 percent of people are saving less during the current economic circumstances, yet 55 percent are working to clear their debts and 32 percent are increasing the amount they pay off each month.
Compare savings accounts via money.co.uk
