The amount of money held in adult savings accounts earning 1% or less has surged by over 125% since the start of the year, according to Paragon Bank.
The bank’s analysis of CACI data showed there was £10.6 billion in savings earning 1% or below in June, rising from £4.6 billion at the end of January.
The biggest jump was recorded between May and June, when the figure increased from £6.6 billion to £10.6 billion.
Meanwhile, the total number of accounts earning 1% or below has also grown from 1.7 million to 3.9 million in the five months from end January to end June this year.
The increase brings to an end a near three-year decline in balances earning 1% or below, which has fallen consistently since the summer of 2022, driven by interest rate increases.
The findings come at a time when the Government is encouraging more people to invest in a bid to boost the UK economy.
Andrew Wright, head of savings at Paragon Bank, said: “The tide is beginning to turn for savings balances earning 1% or below. Given stubbornly high inflation, and plenty of competitive options for savers, consumers have a great choice when it comes to savings accounts, yet many are still missing out on significantly better returns.“We urge savers to shop around and make sure their money isn’t sitting in an account earning 1% or below. Even a small increase in interest can make a meaningful difference over time.”
Main image: luke-chesser-CxBx_J3yp9g-unsplash
