Savers receiving interest on their savings are losing out on up to £7bn by sticking with the banks.

More than 100 million pounds are invested with some of the nation’s biggest lenders each year – just one in every 100 savers can claim their interest back.

But, in a huge blow to investors, more than half the full amount of interest received each year is instead sent to those closest to the big banks.

Money Crunch: A majority of savers receive interest on their savings at the same banks

If bank shares fell 50 per cent from their peak in March 2008 the company in which your money was invested could still receive the full amount.

There have been some significant recent sell-offs in the share price of Britain’s banks, including Barclays’ cut from 30p to 15p in January and Lloyds’ from 3p to 0.99p in May.

If the bank price falls again the top funds will not meet the average profit of the group’s share price and the top funds may be affected by the movements of share prices in line with their share price.

The table below compares the percentage of a customer’s investment funds that is invested in their bank.

The stock market sell-off over the past few months has significantly reduced the percentage of the total that has been invested in those institutions, but still it is down by 7 per cent since the start of the year.

While the degree of sensitivity of pension money to the market is not reflected on the endowment table it is notable that more than a quarter of the value in some of the top banks is invested in larger companies than they are in small and medium sized ones.

So, investors who put money into the big banks have less upside after three years than investors who put their money into smaller ones.

While it is possible to claim all the interest from your employer based on the share price, you need to ask whether you are moving money in to an Sipp before changing the way your pension is invested.

Is it time to switch to Nationwide’s variable pension for higher earners?

The easy access rates on Sipp funds at Nationwide are well below the best they can get on some other providers.

If you hold a fund with the bank through an Sipp or with a new deal you need to ask how you will use the money you earn and have a basic checking mechanism in place.

It could be better to have the funds in a different provider, but there are still benefits to investing with a provider which offers you a higher rate of return.

But we can also encourage savers to take a closer look at their bank pension as it looks like they will receive most of the interest because they are nearer to the banks.