The majority of UK consumers are unhappy with high-street banks, believing they have prioritised profits over passing higher interest rates on to savers, new research has revealed.

A survey of 2,000 UK adults commissioned by SmartSave, run by Chetwood Financial found that 65% of people believe that mainstream banks are putting their profits ahead of passing on higher interest rates to their customers despite the base rate hikes.

This comes as nearly two-thirds (59%) say that their income has decreased in real terms as inflation has exceeded the interest rates offered on their savings. Due to the cost-of-living crisis, 28% of those surveyed say they have stopped saving money entirely.

Only 44% of respondents said they are happy with the rates on offer from their primary savings account provider, whilst, in the past two years, 16% of respondents complained to their bank that they had not offered improved rates on their savings.

28% who responded have opened fixed-term savings accounts, while a similar number (29%) have invested their savings. 

Andy Mielczarek, Founder and CEO of SmartSave, said: “It is clear from this data that there is a disconnect between savers and major banks, with a sense that the high street needs to do more to support them through high inflation and cost-of-living pressures. The hikes in the base rate over recent months are a clear indicator that all savings product providers need to rise to the challenge of protecting their customers' financial health, and clearly, consumers feel that the high street has fallen short.

“The high-inflation environment has put pressure on consumers to be proactive in searching out the best deals to protect the real-term value of their savings, and most don’t believe that the big banks have their best interests at heart. It’s not a surprise that many consumers are looking beyond the high street for better returns and more agile products.   

“The loyalty penalty for savers who don’t play the field is real, and it is clear that the scales have started to fall from their eyes when it comes to the high street. Britons would do well to follow the best rates in order to safeguard their financial wellbeing, and high street banks need to see the writing on the wall if they want to win back the trust of their customers.”