People are keeping over £7 billion in savings at home rather than depositing money in banks or investments.
Research by the Financial Services Compensation Scheme (FSCS) showed the average amount people keep at home is just over £280, excluding money kept in wallets; across the UK’s 24.9 million households the figure amounts to over £7 billion.
One per cent of the people surveyed said they kept over £10,000 at home, four per cent said they had over £1000, while 37 per cent said they had less than £20. People aged between 16 and 34 were most likely to believe in keeping savings at home.
Mark Neale, chief executive of the FSCS, said: “Even though rates are currently low, those wishing to save money should always do so with a bank, building society or credit union which is covered by the FSA [Financial Services Authority], the UK financial regulator. It is vital that savers know their money is protected up to the new limit of £85.000.”
Neale said people deciding to keep money at home for savings or convenience might not be covered by household insurance in the event of a burglary, while under the new rules if a financial institution were to fail most customers would receive their money back via the FSCS within a few weeks.
The survey of 1,000 people carried out by GfK NOP found that small returns on many savings accounts were partly to blame as a third of people said they saw no point in depositing money with a bank or building society when interest rates were at historically low levels.
The FSCS has launched a campaign to raise awareness of the savings protection scheme which it says has low awareness amongst the UK population. The campaign features the character Euan Mee who is described as ‘busy but he gets through life as best he can.’ Euan Mee will be used to bring home the message about the FSCS. More information is available at www.fscs.org.uk.
The campaign coincides with changes to the FSCS which raises the protection per person per regulated institution to £85,000 and speeds up the time it takes for people to receive their deposits in the event a bank, building society or credit union fails.
© Fair Investment Company Ltd