Savers with tax-free ISAs may be missing out on the best returns by failing to switch their provider when introduction bonus schemes come to an end, a new study has found.
Consumer Focus found that more than 66% of people who had taken out an ISA with such a bonus did not move on once the high interest rate ended. Another quarter of savers were not even aware if their account had such a bonus, while a third did not know if theirs had expired or not.
Meanwhile, a third of all ISA holders have had their account for more than five years - which means they could get themselves a better deal by changing provider.
Out of the cash ISAs which pay more than 3% interest, Santander is top of the tree with a 3.5% rate for existing customers. Consumer Focus' Oliver Morgans said: "Around one in three of us has a cash ISA so millions of people are likely to be losing money by not switching when their bonus rate ends. Unfortunately it seems that banks use higher interest rates to lure customers in and then aim to cash in on their customer's inertia.
"Sadly ISA customers have to watch banks like a hawk if they are to get the best deals. With consumers getting a paltry return as low as 0.1% on some accounts, our advice to savers is to check your rate and if you are not happy, vote with your feet and switch to an ISA that pays more."
