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Savings back in favour, but NS&I left out in the cold

by LLB Editor
31st Jul 23 12:06 pm

A total of £3.1 billion of inflows to savings accounts were recorded in June – compared with £3.4 billion in withdrawals in May.

Fixed-rate accounts saw £6.6 billion deposited.

Still £270 billion in savings accounts earning nothing
NS&I sees another drop in flows in June.

Laura Suter, head of personal finance at AJ Bell, comments on the latest Bank of England Money and Credit data: “The government and Bank of England will be breathing a sigh of relief that the huge withdrawals from savings accounts that we saw in May weren’t replicated in June. While households withdrew £3.4 billion of money from savings accounts in May, there was a huge turnaround to £3.1 billion of inflows in June. Part of the Bank’s plan to reduce inflation is that people are nudged to save more of their money rather than spend it, meaning May’s outflows were their worst nightmare. But this year has taught us that the data can change on a knife edge, so Rishi Sunak will be wise not to rejoice too enthusiastically just yet.

“Once again people were flocking to fixed-rate accounts, with £6.6 billion deposited in them during June, as people snap up higher rates on one-year fixes. But there is still a huge chunk of money sitting in accounts earning nothing. In fact the total amount in these accounts increased in June, rising from £250 billion to £270 billion. This puts it near the peak of £273 billion that we saw in September last year. It highlights that there is still a huge amount of work to do to encourage savers to move their money to accounts paying a decent rate. Shopping around is a bit of hassle, but if you’re looking at a difference between earning 0% or north of 4.5% on your savings, it’s worth a few minutes work.”

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