Savers blinded by loyalty are losing huge amounts of interest

Savers have been warned not to be blinded by loyalty, as it could cost them hundreds of pounds.

Rates scrutineer Moneyfacts said those who let their nest egg languish in old accounts could be losing out on hundreds of pounds per year, as banks reduce the interest rates and hope customers won't notice.

An average closed easy-access savings account, meaning one that is no longer available to new customers, pays only 2.39 per cent, which is below the rate of inflation.

Inflation is currently sitting at 2.8 per cent, so any account paying less than that in interest will see your money lose value in real terms.

Someone with £20,000 in savings would lose £322 a year, compared to an account paying 4 per cent, Moneyfacts said.