As the cost-of-living crisis continues, new research from LHV Bank reveals that 46% of UK adults are struggling to save regularly, despite reported income increases for nearly a third of the population.
The study, conducted by Opinium on behalf of LHV Bank, highlights growing frustration with both traditional and digital banks. Most consumers (two-thirds) believe that digital banks should pass on the savings from not operating physical branches, increasing pressure on financial institutions to deliver better value and transparency. Notably, 41% of respondents would support government legislation to ban 0% interest current accounts altogether.
Only one in five UK adults think their bank offers fair value, while 53% are willing to switch providers for better interest rates. Among younger consumers aged 18-34, this figure rises to 65%. In response to these concerns, LHV Bank has launched the UK’s first new current account in nearly five years, offering a competitive 3.25% interest rate and zero fees to challenge traditional banking models.
According to the LHV survey, a stark disconnect exists between income growth and financial wellbeing. While 29% of respondents reported earning more in 2024, 31% feel financially worse off. Women are disproportionately affected, with 35% feeling financially worse off compared to 28% of men.
This financial strain partially reflects a growing gender gap in saving habits. On average, men save £280 per month—£115 more than women, who save an average of £165. Additionally, men are more likely to earn interest on their current accounts at higher rates; 47% of male account holders earning interest receive more than 2.1% AER, compared to just 35% of women.
Kris Brewster, director of Retail Banking at LHV Bank, states: “We launched our current account to raise the bar in banking—rewarding customers with meaningful rates at a time they need it most. We’re paying a highly competitive 3.25% interest rate while still growing responsibly and profitably, showing that running a strong bank can go hand in hand with rewarding customers. Most banks could do this—they just choose not to.”