• £365 billion held in non-ISA instant access savings accounts with 0.25% or lower interest, Paragon Bank analysis finds
• A further £74 billion held in non-ISA instant access accounts offering between 0.26%-0.50%
• The analysis of CACI records overall savings deposits rising by £1 billion to £997 billion
• 37% of non-ISA instant access accounts found to hold less than £100
• Overall deposits in ISA accounts falls by £1 billion to £262.7 billion

Over half of savings deposits are held in non-ISA instant access accounts offering less than 0.25% interest, new Paragon Bank analysis has found.

Paragon analysis of the latest CACI data found that out of the overall total of £997 billion in savings deposits, £365 billion was held in non-ISA instant access accounts offering 0.25% interest or lower.

The data, which compiles the savings deposits of 34 leading providers, also found that non-ISA instant access accounts offering 0.25% or lower interest comprised 78% of all such savings accounts by volume.

A further £74 billion was found to be held in non-ISA instant access accounts providing rates of 0.26%-0.50% - 12% of all non-ISA instant access deposits.

The figures also recorded a rise in overall savings deposits from July to August of £1 billion to £997 billion.

The overall value of deposits held in Instant Access ISA accounts also continues to fall, the data reveals, with £176.4 billion recorded at the end of August compared with £183.7 billion in March.

Overall, ISA deposits fell between July and August from £263.8 billion to £262.7 billion.

Meanwhile, 37% of all non-ISA instant access accounts hold £100 or less, whilst 20% have balances in excess of £10,000. Higher-rate taxpayers will breach their Personal Savings Allowances with balances of that amount in accounts earning in excess of 5%.

Commenting on the analysis Derek Spawling, Paragon’s Savings Director, said: “With the Bank of England’s base rate increasing from 0.25% in February to 1.75% at beginning of September, it is deeply concerning to see that over half of the UK’s non-ISA instant access savings are being held in accounts that provides savers with little return on their deposits. 

“As inflation and the pressure on household increases, so does the need for savers to take a proactive approach to finding the right financial products for their circumstances.

He continued: “Whether it be Fixed Rate, Easy Access, or Cash ISA accounts, savers should also look beyond the high street providers and to challenger banks in the search for the best rates and terms for them – as savers are often missing out on much improved returns on their deposits by simply not taking the time to do so.”

For further information contact:

Tom Frew
Media Relations Manger
Paragon
E: [email protected]
www.paragonbank.co.uk 

Notes to editors:

Paragon Bank PLC a subsidiary of the Paragon Banking Group PLC which is a FTSE 250 company based in Solihull in the West Midlands. Established in 1985, Paragon Banking Group PLC has over £13 billion of assets under management and manages over 450,000 customer accounts.

Paragon Bank PLC is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Registered in England number 05390593. Registered office 51 Homer Road, Solihull, West Midlands B91 3QJ. Paragon Bank PLC is registered on the Financial Services Register under the firm reference number 604551.