HOW TO BEAT THE SAVINGS CRISIS

Unmissable Money Mail series to boost YOUR income in the middle of this paper

HAVE you watched in horror and dismay as the interest on your savings has plummeted to an unimaginable low . . . and then fallen some more?

Millions of savers have suffered from Britain’s nine years of record low rates — but help is now at hand.

Today, Money Mail launches a brilliant five-part series that will arm you with all the tools you need to boost your nest egg.

Many savers don’t realise that they can squeeze thousands of pounds more interest from their savings each year — without taking any risks.

And even if you haven’t built up a big savings pot yet, there are rich rewards for making your money work harder.

The trick is to use a combination of top current and savings accounts and avoid the big banks, which pay as little as 0.01 pc.

SWITCH YOUR BANK— AND REAP THE REWARDS

SWITCHING accounts used to be a bind, but new rules for both savings and current accounts have made it much simpler — and you will be well-rewarded for your efforts.

Susan Hannums, director at website Savings Champion, says: ‘Providers count on savers not having the time or inclination to move. But even with rates at low levels, by switching, those with larger sums can increase their annual interest from pennies to over £1,000.’

Kevin Mountford, from comparison website Moneysupermarket.com, says: ‘Most savers don’t think it is worth the hassle of switching. We live busy lives and the job often goes to the bottom of the pile of things to do.

‘But we owe it to ourselves not to play into the hands of the big banks.’

Worryingly, money stuck in current accounts paying no interest has soared by 52 pc since 2012 — when savings rates first hit rock bottom — from £115 billion to £176 billion.

The big banks such as Barclays, Santander, Lloyds, NatWest, Halifax, HSBC and RBS dominate because savers tend to open a savings account with the same bank that runs their current account, a study by City regulator the Financial Conduct Authority showed. And they stick with them even though they pay a pittance.

Sticking with such accounts costs you dear. NatWest pays as little as 0.01 pc. Lloyds and Halifax pay 0.05 pc on their cash Isas once you have been in the account for 12 months — which is just £5 total interest on £10,000 for the whole year. If you have built up £50,000, you’ll earn £25.

Switch it to a better deal at 1.01 pc with Virgin Money’s Defined Access Isa and your interest rises more than 20-fold to £505. With £100,000, you can boost your interest from £50 to £1,000 a year by picking top accounts.

The Isa allowance is rising from £15,240 to £20,000 in April, so it would take five years to feed cash into these accounts.

If you’re investing outside a cash Isa, you can get a variable account at 1.1 pc from RCI Bank. Or if you’re happy to tie up your money without access, you can get as much as 2.1 pc over two years from Atom Bank (see next page). In April, the Government will launch its new National Savings & Investment bonds paying 2.2 pc. However, the deal will only be available online and the maximum investment will be £3,000. The interest would be £ 66 a year — up from 30p in the worst accounts.

Even if you haven’t built up a lump sum, you can do better than leaving your money in a lousy account. A £250-a-month saving at 0.01 pc gives you just 16p interest over the year.

Virgin Money Regular Saver at 2.25 pc — which gives you access to your money at any time — will pay around £35.

You should look to wringing as much as you can from your current account by moving that too.

Nationwide pays 5 pc on balances up to £2,500 on its FlexDirect account. Here you’ll see £ 125 interest — a big improvement on 25p in a normal, lowly account.

TSB gives switchers into its Classic Plus up to £120 cashback on their spending and interest of 3 pc on balances of up to £1,500.

Under the cashback deal, you get £5 per month if you make two direct debits and an extra £5 a month if you make 20 debit card payments — a total of £164.40 a year in cashback and interest.

IT’S A DODDLE TO COMPARE ACCOUNTS

FINDING better savings accounts has got simpler. New rules demand banks and building societies show details of their accounts in a uniform format so you can easily compare them on rates, whether they are run online, through the branch or by phone or post, and how you take money out.

You can open an account online without giving all the usual identification. The provider checks you out using the voting register and details of your current account which you link to your new account to move money across.

If you want a new branch-based account, phone and ask what they need you to bring in.

To switch your cash Isa or current account, ask your new provider to arrange it for you. Your current account switch will go through within seven days and the bank will move all your direct debits. If anything goes wrong, you will get a refund of any interest or charges you face.

Cash Isa transfers used to take 30 days, but the banking regulator told banks and building societies to speed this up so most now take just seven days. Smaller banks pay the best rates. Atom Bank pays 1.8 pc for one year — nearly four times HSBC’s 0.5 pc.