Fintech

UK Families Save £5,000 Per Household But £225bn Remains In Accounts With No Interest

With almost a year of lockdowns, working from home and no travel, it’s perhaps not surprising that UK families have saved money where they can.

The Bank of England’s Monetary Policy Report in February 2021 showed that “households have accumulated an excess stock of savings of £125 billion” throughout the pandemic, equating to an average of £5,000 per household. The Bank of England expects this figure “to rise substantially over the first half of 2021”, despite interest rates remaining at historically low levels.

Against this backdrop, leading savings and retirement firm Aviva has today launched a new cash savings platform, Aviva Save. This new online marketplace gives customers a choice of different savings accounts from a variety of banks. More banks and savings accounts, including notice and easy access accounts, will be added to Aviva Save throughout 2021, increasing the range of ongoing choice for its customers.

Aimed at supporting savers who want a simple and convenient way to manage their savings in one place, Aviva Save will enable customers to open and switch accounts, from a range of banks, without having to re-register multiple times with different providers. The cash savings products can also be used to complement Aviva’s longer term savings vehicles, such as ISAs and pensions.

Roger Marsden, Managing Director, Retail Savings and Retirement said, “Although we recognise that not everyone will have the luxury of extra cash at this time, those who do will want their money to work as hard as possible.

“Whilst many savers may be frustrated with the low returns they’ve received on their savings during lockdown, the effort involved in moving their money around is often a barrier to them and stops them doing anything at all. This can lead to a general apathy amongst savers to switch, despite there often being more competitive rates available. Aviva Save will address this by offering customers a range of accounts and rates over time, so they can manage their finances and switch between accounts easily.

“Our own research showed that more than half (57%)5 of people took action in relation to their savings during the last lockdown and, during these uncertain times, they will want to make sure their finances and savings can meet their longer-term goals, as well as their more immediate needs. Lockdown has meant lifestyle and spending habits have changed, and they will continue to change throughout 2021. It is more important than ever that customers take a broader view of their finances and their savings, and shop around for the best option to meet their needs.”

Aviva has partnered with Raisin UK, pioneers in open banking and the leading pan-European one-stop-shop for online savings. Initially it will offer its customers a selection of fixed-term savings accounts with a number of banks.

Katharina Lueth, VP of Europe for Raisin and Chairwoman of Raisin UK, commented: “The launch of Aviva Save with Raisin represents a significant step in the future of deposits and the fintech industry. In December, flows into deposit accounts within the UK savings market rose to £20.9bn, an increase from an already high £18.4bn in November. As a result, the Bank of England estimates that there is almost £1.6tr in household cash deposits – with a worrying £225bn sitting in non-interest bearing deposits. Partnerships like this demonstrate the increased importance of finding new ways to provide customers easy ways to access higher interest rates and optimise their savings.”

Author

  • Gina is a fintech journalist (BA, MA) who works across broadcast and print. She has written for most national newspapers and started her career in BBC local radio.

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