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The amounts sitting in UK accounts, and the amounts that don’t pay interest were more than £276 billion in December, New Bank of England data shows.
December figures say investors hold cash in zero interest accounts just below the £282 billion record set in the previous month, and they see inflation eroding money. It sparked concerns from experts.
The consumer group said there could be several reasons why people are leaving money in non-haptic-backed accounts.
“People may want to have easy access to their cash for a rainy day or they may not notice that their fees have fallen because they first opened an account,” Lina Sewaraz said. I said that. Money expert.
“Some good interest rates are available, so if the bank is not paying interest, it’s worth shopping and moving out the provider,” she added.
As of December last year, the average fee for a simple access cash account was around 3%, according to MoneyFacts.
Laith Khalaf, head of investment analysis at investment platform AJ Bell, agreed that it is “inexplicable” that a lot of money is held in such an account when interest rates are very high.
“When interest rates approached zero, moving out of an account that didn’t pay much, but that’s now changed dramatically,” he said.
Khalaf noted that top savings accounts paid more than 4%, saying, “Many savers can give great favor by switching to more competitive accounts.”
Despite appeals from experts to get the best deal for consumers to save, the amount held in non-profit bearing accounts has doubled from £135 billion over the past decade, and is currently It accounts for 15.5% of all money held by individuals. UK accounts and cash ISAs, according to BOE data.
Khalaf warned that anyone who holds money in non-profit bearing accounts that have been eroded over the next year due to inflation, which the Bank of England forecasts, will reach 3.7%.
“For money held in an account that does not pay interest, that means every £100, its purchasing power can slightly reduce £96 in a year,” he added.
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“Even when inflation returns to its (2%) target it still erodes the value of money that is not growing.”
The bank’s analysis covered accounts that allow cash on deposits to be withdrawn without notice or penalty. Cash also covered situations during transportation.
Last year, BOE meant that some savings were misclassified into accounts with interest, and then £44 billion was in the bank’s zero accounts in November 2024 data. It has been revealed that it has been classified.
