{"id":222267,"date":"2025-10-24T08:57:12","date_gmt":"2025-10-24T08:57:12","guid":{"rendered":"https:\/\/www.newsbeep.com\/uk\/222267\/"},"modified":"2025-10-24T08:57:12","modified_gmt":"2025-10-24T08:57:12","slug":"household-savings-hit-record-2-2trillion-as-sticky-inflation-and-tax-hike-fears-see-cash-stockpiled","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/uk\/222267\/","title":{"rendered":"Household savings hit record \u00a32.2trillion as sticky inflation and tax hike fears see cash stockpiled"},"content":{"rendered":"

By LUCY EVANS, MONEY REPORTER<\/a> <\/p>\n

Updated: 04:30 EDT, 24 October 2025 <\/p>\n

Savers are sitting on a record \u00a32.2trillion in cash despite the Chancellor’s efforts to persuade more households to invest their wealth, new data shows.<\/p>\n

Household savings climbed in July \u2013 the most recent data \u2013 to a record high, according to analysis of Bank of England statistics by financial services firm Bowmore Wealth group.\u00a0<\/p>\n

This is despite an aggressive investment push from the Labour to bolster the flailing economy by encouraging savers to invest in UK companies.<\/p>\n

Consumers are funneling more money into savings accounts despite squeezed budgets as confidence in the economy plummets.<\/p>\n

And as Budget rumours of chunky tax rises swirl, households are shoring up their finances by sitting on their\u00a0wealth to mitigate the announcements made next month.<\/p>\n

\"Families <\/p>\n

Families are keeping some \u00a32.2trillion in saving accounts<\/p>\n

Households are also hiding their money from sticky inflation<\/a> as the cost of goods has been pushed up some 3.8 per cent.<\/p>\n

Savings appetite is growing when compared with our income, Bowmore found after analysing Office for National Statistics data.\u00a0<\/p>\n

The household savings rate \u2013 the percentage of disposable income consumers are putting aside \u2013 hit 11 per cent in the first quarter this year.<\/p>\n

Charles Incledon, of Bowmore, says: ‘It’s clear that households are continuing to prioritise short term financial security.<\/p>\n

‘The returns on cash savings have improved, but over the long term, shares tend to outperform cash in both high and low inflation environments.’<\/p>\n

Pouring money into equities outperforms cash savings over the long term, but many savers see investing as high risk with a possibility of losing their money.\u00a0<\/p>\n

But for example, global equities, represented by the MSCI world index, have returned an average of 12.6 per cent a year over the last ten years.\u00a0<\/p>\n

However, savings accounts and cash individual savings accounts (Isas) typically have a far lower rate of interest, even during periods of high inflation seen in the last few years.<\/p>\n

Mr Incledon adds: ‘If people are reluctant to invest because they’re unsure where to start, then getting financial advice is a valuable first step.\u00a0<\/p>\n

‘Good advice can help savers balance risk, make the most of their allowances and build a strategy that protects and grows their wealth.’<\/p>\n

It’s likely many do not want to take an unnecessary risk with their heard-earned money and prefer to keep their cash in savings accounts.\u00a0<\/p>\n

Plus, many savers need their money within the next five to ten years, whether that’s for retirement or for home improvements.\u00a0<\/p>\n

Experts typically say that investments are best held for a minimum of\u00a0five years to ride out market ups and downs.<\/p>\n

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