Savings deposit growth shows signs of slowing.
Over £300 billion worth of savings is still sitting in accounts offering a rate of 0.1% or less, according to research released by Paragon Bank and CACI, a data company, on Wednesday.
“It is concerning to see that over £300 billion continues to rest in accounts offering only 0.1% or less, especially at a time when savers could be doing more to potentially protect their savings from the rise in inflation,” said Derek Sprawling, Savings Director at Paragon Bank.
However, since January, when the Bank of England’s (BoE) base rate stood at 0.25%, the overall deposits held in accounts offering 0.1% or over increased by 64% to nearly £317 billion.
While this figure may have increased, the overall growth in savings has been sluggish. CACI figures for 2022 had shown monthly rises of between £2 billion and £4.5 billion between January and April. From April to May savings deposits increased by only £7 million.
“With inflation starting to eat into people’s pay packets and pensions, it is unsurprising that savings growth has slowed – but it will take longer to see if this is the start of a long-term trend,” said Sprawling.
