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Total savings balance growth stalls but average balances reach new high of £12,237

CACI data analysed by Paragon Bank[1] showed that the saving market has seen a small dip in value for the first time this year, although average savings balances have reached a new high.

Total savings stock recorded on CACI’s database, which captures savings data from more than 30 leading providers, has grown by 8.3% between March 2020 and September 2021, climbing from £903 billion to £978 billion.

Despite this steady growth, savings balances have remained static since July, reflecting the impact of lockdown lifting on households’ saving and spending habits. In September, total savings stock declined for the first time this year, dipping by £300 million to £978.3 billion.

The average balance however reached a new high of £12,237 – an increase of over £1,000 since March 2020 where it stood at £11,141 and a slight increase on August. This suggests that even though the total value of savings balances has dipped slightly month-on-month, the volume of accounts has also reduced, which means average account value remains in growth.  

Easy access balances driving growth

Easy access non-ISA balances have been a key driver of the savings category growth and continued to be on an upward trajectory in September – they now stand at £597 billion, accounting for a colossal 61% of the entire savings market.

This represents an increase of 18.2% since March 2020 and an 8.8% increase year-on-year. The average easy access balance now stands at £11,826, a growth of £1,580 since March 2020 where it stood at £10,246.

Instant access ISAs remained steady since the pandemic began, seeing a small amount of growth from £176.3 billion to £185.1 billion in September 2021. The growth of the savings market outpaced this product category, which meant it lost market share despite being in growth – dipping from 19.5% to 18.9%.

Despite the growth of the easy access category, 71% of easy access balances continue to earn a rate of 0.1% or less – less than seven times the best rates available in the best-buy tables. This figure has been fairly consistent throughout the year, dropping from 72% in August.

Fixed Term savings continue to decline despite rates picking up

In contrast to the easy access market, the fixed term market has continued to see its value reduce throughout the pandemic. Fixed term non-ISAs stand at a value of £71.7 billion, down from £92.7 billion at the start of the pandemic, a reduction of 22.7%.

Derek Sprawling, Savings Director at Paragon Bank, commented on the data:

“The pandemic has created a contrasting picture of the savings landscape. While easy access has been on a consistent upward trajectory, other product categories such as fixed rate bonds have seen a reduction in market share and value.

“However, one of the dominant trends that we are noting in the easy access space is that seven out of ten savers continue to receive a really low return on their money. This is despite rates picking up across the board and best-buy deals currently offering people the opportunity to earn at least six or seven times more interest than they currently are in a low-paying account.

“Our analysis the large portion of savings still languishing in current accounts earning little to no interest, with that category also seeing significant growth during the pandemic.

“Our advice to savers is use the festive period and new year as an opportunity to take stock of their finances and check what rates they’re receiving on their savings, moving money away from low paying accounts. It’s key for people to look for the best deal and to ensure they are maximising returns on their money.”

[1] CACI produce an analysis of deposit stock from the main deposit banks providing data from more than 30 providers, based on individual cash savings. It allows us to focus on savings accounts, by combining all account types and both ISAs and non-ISAs.

Unless stated otherwise, all data in this release is sourced from: CACI’s Current Account & Savings Database, as of end of September  2021  

For additional information about this release, contact:

Leila Taleb, Media Relations Manager at Paragon Bank 

[email protected]