New research by the Financial Services Compensation Scheme (FSCS) points towards a severe lack of consumer confidence, with relation to savings accounts.
The research found that £7 billion worth of savings are being kept at home, rather than in banks in response to fears that money could be at risk should another crisis occur.
The research found that people keep an average of £280 at home, not including the cash they keep in their wallets. One per cent of those questioned said they keep over £10,000 at home and four per cent said they keep more than £1,000.
Interestingly, and possibly against what most people would expect, it is the younger savers who are most likely to keep cash at home. This fact should ring warning bells for the savings industry as experiencing the banking meltdown has obviously tarnished many young people’s views on saving.
Mark Neale, the FSCS chief executive, is now urging people to keep their cash in banks that are members of the FSCS. He explained, "Even though rates are currently low, those wishing to save money should always do so with a bank, building society or credit union which is covered by the FSA [Financial Services Authority], the UK financial regulator. It is vital that savers know their money is protected up to the new limit of £85.000."
