UK savers grow easy access savings balances by 303%

UK savers saw their easy access savings account balances grow by 303% during March and April 2020 compared to last year, according to industry data analysed by Paragon Bank.

More than a third (34%) of instant access balances, however, are currently receiving an interest rate of less than 0.1%, with £176bn worth sitting in these accounts.
 
The figures showed that savers added £11bn to their easy access saving accounts between the start of March and the end of April, meaning growth has quadrupled compared to the same period last year. During March and April 2019, there was an increase of only £2.7bn.
 
In April alone, Paragon highlighted that easy access balances grew by £6.2bn – a 27% increase from the previous month. There was also a 58% increase in balances earning a rate of interest of 0.1% or less between March and April.
 
Paragon suggested the surge in easy access cash balances indicates people want fast access to their spare cash in the “uncertain economic climate" brought on by the COVID-19 pandemic.

“We are seeing a steep increase in people putting their money in easy access savings accounts, which we expect will persist over the next few weeks as they seek to make financial provisions in the midst of the COVID-19 pandemic,” Paragon managing director of savings, Michael Helsby, commented.

“The low rate of interest received on many easy access balances suggests that a lot of savers are putting money aside without seeking a competitive interest rate. Many are likely to be opening accounts linked to their current account for ease of access, but those often pay a lower than average rate of interest.”

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