Savers grew fixed-rate savings account balances during the final quarter of 2022 as they responded to rising rates, Paragon Bank analysis has found.

Overall, the value of savings in fixed-rate accounts ended the year at £180.5 billion, up from £151.6 billion at the end of September 2022.

Paragon’s analysis of CACI data shows that fixed-rate ISA balances ended the year at £89.7 billion, up from £79.4 billion at the end of September 2022, and £74.5 billion at the same period in 2021.

Fixed-term non-ISA accounts rose from £72.2 billion in September to £90.9 billion at the close of December, and up from £68.7 billion at the end of 2021.

Non-Isa instant access accounts grew from £628.3 billion in September to £632.8 billion in December, but ISA instant access variants fell from £176.4 billion to £167.8 billion over the same period.

CACI compiles the savings deposits of 34 leading providers of adult cash savings.

Derek Sprawling, Paragon Bank Savings Director, said:

“We saw a clear trend towards fixed-rate accounts during 2022, which accelerated during the final quarter of the year. Rates offered by savings providers increased during that period as the Bank of England Base Rate grew, whilst we may also have seen a flight to safety from other asset classes due to the economic volatility of that period.”

He added: “Savers also may be taking a long-term view on inflation. Although inflation was above 10% at the time these accounts were taken out, it is expected to revert to longer-term trends towards the end of this year. This means that savers able to secure a fixed-rate at above 3% or 4% might see the value of their money grow in real terms once inflation has come down to the 2% long-term target.”

Overall savings balances grew by around £24.8 billion between September and December, ending the year £1.028 trillion.

Meanwhile, the proportion of instant access non-ISA accounts earning more than 0.5% rose above 50%. CACI’s figures show that 51.33% of accounts earn 0.5% or more, with the remainder earning below that rate, equating to £219.3 billion.

For further information contact:

Michael Clarke
Head of Media Relations
Paragon Bank
07740090746

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 £14 billion of assets under management, helping more than 340,000 customers to achieve their ambitions.

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.