More than £280 billion is idly sitting in UK accounts earning no interest, new figures from the Bank of England have revealed.
It comes despite some savings accounts offering interest rates in excess of 4.5%.
Laura Suter, director of personal finance at AJ Bell, said the figure “sums up the apathy” of the UK’s savers.
“The latest Bank of England data to the end of March shows that there is a mountain of cash paying no interest, which has ballooned in recent years, despite the Bank of England’s base rate rising and savings rates remaining decent. The pile of cash getting no return has grown in the past year by £51 billion. The nation is missing out on millions of pounds of potential returns on their money.”
According to AJ Bell, if the £230 billion sitting in zero-paying accounts had earned a 3% return in the past 12 months, it would have made savers £6.9 billion better off.
In addition to earning no interest, Suter warned that savings are being eroded by inflation.
“While inflation has dropped from its double-digit highs, it is still chipping away at the spending power of your money each year. Keeping the money in your current account or an old savings account earning nothing is as good as stuffing it under your mattress.”
Suter said the last time interest rates were at 4.5% was in October 2008, when just £39 billion was sitting in zero-paying accounts.
While it has been mooted that the Government is planning to cut the amount of money people can hold in cash ISAs in a bid to encourage more people into investing, Suter said people also need to take action themselves to make their money work harder.
