What did Yorkshire Building Society warn about?

Yorkshire Building Society warned that more than 12 million UK current accounts with balances above £5,001 earn 1% or less in interest. Savers are urged to review their rates and consider higher-paying UK savings options to improve returns, especially as early-2026 switching pressures banks to compete harder on deposit pricing.

How much can a small rate increase add to my savings?

As a rule of thumb, every extra 1 percentage point on £10,000 generates £100 a year before tax. If your current account interest is 1% or less, even a modest move to a higher rate can add meaningful income. Keep enough cash for bills, and shift the rest to a better-paying account.

Will this trend affect bank profits in the UK?

Yes, if more people switch to higher-rate products, banks’ funding costs can rise and net interest margins may narrow. Early-2026 could see stronger deposit competition. We expect more targeted offers on high-interest savings as banks aim to retain balances and reduce churn from rate-sensitive customers.

What should I check before moving money to a savings account?

Confirm the AER, any bonus periods, withdrawal limits, and minimum deposits. Check FSCS protection and stay under £85,000 per person per bank group. Consider tax: ISAs are tax-free, and many people benefit from the Personal Savings Allowance. Make sure the account’s access rules match your cash needs.

Global Market Insights

January 01: Yorkshire Building Society warns £5,001+ earn 1% or less

ByHuzaifa Zahoor January 1, 2026January 1, 2026

Yorkshire Building Society has warned that more than 12 million UK current accounts holding £5,001 or more earn 1% or less in interest. That is costly for savers and could shift money towards higher-rate accounts as 2026 begins. Yorkshire Building Society urges customers to review UK savings rates and move idle balances to better-paying options, improving returns while reducing cash drag. Rising deposit switching could also lift banks’ funding costs and squeeze net interest margins, increasing competition for retail deposits across the UK. See details and practical steps below source.