15% of UK adults don’t have a single savings account, while a further third (32%) have only one, according to new consumer research published by Flagstone, the UK’s leading savings platform*, on the first day of UK Savings Week.

The current size of the UK savings market stands at £1.5 trillion**, but recent analysis of Bank of England data suggests that as much as £1.1 trillion of that cash is earning savers less than 2%***. £250 billion of those savings are earning nothing at all****. To better understand what prompts this so-called saver inertia, Flagstone commissioned Opinium to conduct an independent survey of 2,000 UK adults in Summer 2024*****.

The findings show that, going against common assumptions, a lack of savings accounts isn’t necessarily attributable to younger people or those on lower incomes. 

• A quarter (26%) of those with a household income of £100k or higher have one savings account or none at all. 
• This proportion rises to nearly a third (30%) among those whose household income is between £80k-100k. 
• Likewise, 46% of those aged 55 and over have zero or one savings account - more than the 41% of those aged 18-34 who say the same. 

The average UK adult has £1,000 to £5,000 in savings spread across two to five savings accounts held with two to five banks. While this on paper looks healthy, the movement of these funds to maximise rates and return is far less buoyant. 

Flagstone’s data shows a low tendency to diversify savings accounts (particularly between banks).

• A quarter (25%) of savers with multiple savings accounts hold them all with one bank. 
• Nearly 3 in 5 (58%) say that most of their savings are with the same bank that maintains their current account. 

Despite competitive interest rates and high competition among banks to top the best-buy tables, UK savers are not in the habit of moving savings to find better returns. 

• Half (49%) of savers haven’t moved savings between existing saving accounts within the same bank in the last 12 months.
• 3 in 5 savers (57%) haven't moved savings into new savings accounts within the same bank in the last 12 months. 
• Nearly two thirds (62%) of savers haven't moved savings to a new savings account in a different bank in the last 12 months.
  
  

Claire Jones, Head of Strategic Relationships at Flagstone, comments:

“Certainly the findings of our research must be reviewed through the lens of the current economic context. Many people - even those on higher incomes - simply do not have enough left to save at the end of each month.

“But the fact that the average UK person has several thousands of pounds saved across multiple savings accounts, yet seldom moves funds between them nor seeks out better rates, points to a troubling mass-market situation: entrenched and wide scale saver inertia.

“Despite efforts by banks and the regulator to make moving savings between banks more attractive and convenient than ever, simply not enough savers are motivated to seek better terms and rates to grow their hard-earned savings.

“With the base rate now in gradual decline and the new government readying multiple tax policy changes that’ll make investing less palatable for many, finding the best savings rates to make your money work harder in an almost risk-free, low-effort way is more important than ever. Saver inertia must be tackled before tax policy changes take the shine off investments.

“Saver inertia is a real phenomenon that risks damaging our market. Banks are already fulfilling the requirements expected of them to promote better rates to their customers and provide the mechanisms needed to make switching accounts easy and quick, and yet still half of UK adults simply don’t move. Economics works best when supply and demand are fairly matched. If customers don’t demand savings options, how do we guarantee that banks remain incentivised to offer competitive rates?” 

* Based on the number of banks on the panel, savings accounts on the platform, and Trustpilot customer review ratings

** FCA Cash Savings Market Review, July 2023

*** Analysis of Bank of England Credit data, Jan 2024 

**** FCA Cash Savings Market Review, July 2023

***** Market research commissioned by Flagstone and conducted by Opinium among 2,000 UK adults, Q2 2024

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Carmen Dixon: 07717 278846 | carmen@ripplecomms.co 

Jo Candy: 07909 992082 | jo@ripplecomms.co