• £73.5 billion placed into new savings accounts during the final quarter of 2022 – 317% up on £17.6 billion recorded in same period in 2021
• Cash held in current accounts has peaked – down £13.5 billion in the final three months of 2022 – the biggest shift in over a decade

Savers recorded the highest level of switching activity on record during the fourth quarter of 2022 as they responded to rising rates, Paragon Bank analysis has found.

Paragon’s analysis of CACI data showed that savers placed £73.5 billion into new savings accounts during the final three months of last year. The figure was nearly as much as the £78.7 billion placed during in the entire of 2021.

The figure represented an 84% increase on the £40 billion placed in new savings accounts during the third quarter of the year, and a 317% increase on the £17.6 billion recorded in the corresponding period in 2021.

CACI’s figures show that £33.9 billion was opened in non-ISA instant access accounts during the quarter, with £22.4 billion placed in non-ISA fixed-term accounts. With regards to ISAs, £4 billion was opened into instant access variants, with £12.7 billion in fixed-term ISA accounts as signs of increased ISA take up show through.

CACI compiles the savings deposits of 34 leading providers of adult cash savings. A new account is classed as one that has been funded with at least £1 and has an open date within a specific month. 

The transfer of cash held in current accounts could be driving the change. Current account balances surged during the pandemic as people stored excess money in their current accounts.

CACI’s data shows that at January 2020, £313 billion was stored in current accounts, rising to a peak of £460 billion in September 2022. That trend had started to reverse and current account balances ended the year at £447 billion.

Derek Sprawling, Paragon Bank Savings Director, said:

“The rate of new account openings was phenomenal during the fourth quarter of last year as savers woke up to the benefits of placing their money into accounts with rates that work harder for them.

“Our analysis shows that a significant amount of cash held within current accounts moved during this period, so we would expect that money to have been directed towards savings accounts offering better rates. However, even though we have early indications of the trend continuing into 2023, there is still hundreds of billions in deposit balances receiving rates below 1%.”

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.