Average savings balance surpasses £12k mark

The average savings balance now stands at a record £12,077 as UK bank balances have continued to grow throughout the pandemic.

Paragon Bank analysed the total savings stock recorded on CACI’s database, which captures data from more than 30 providers, and found it has grown by 8% since March 2020, climbing from £903bn to £975bn.

The majority of this growth has been driven by easy access non-ISA accounts, which grew by more than 16% over the course of the pandemic. In March 2020, CACI’s easy access accounts amounted to a value of £505bn and now stands at a total £588.6bn.

Paragon also revealed that the market share of 60.3% marks an increase of more than four percentage points from 55.9% at the start of the pandemic. The average easy access balance now stands at £11,603, a growth of more than £1,300 since March 2020 where it stood at £10,246.

This boost in easy access balances has been against a backdrop of most other product categories being in decline.

Paragon’s analysis revealed that the fixed rate non-ISA market has dipped steadily throughout the pandemic, reducing from a value of £92.7bn and market share of 10.3% in March 2020, to a value of £73.9bn in June this year and market share of 7.57%.

Fixed rate ISAs stood at £80.3bn in June 2021, having fallen 8% from £87.3bn in March last year.

Paragon savings director, Derek Sprawling, commented: “We are seeing that people are saving at a slower pace since pandemic restrictions lifted, which is to be expected. However, saving stock continues to increase more consistently month-by-month. This makes it clear that saving remains a priority for many.

“This could be an indication that people are still feeling cautious and prioritising building contingencies and an emergency fund while the economy still feels uncertain. It will be interesting to see how this trend evolves as we see the impact of peak holiday season.

“For those still keen to continue to put money aside, we are seeing some green shoots across the savings market, with both fixed rates and now easy access accounts starting to uplift.

“Savers looking to get a decent return on any pandemic funds should make the most of those deals while they last as the market has proved volatile over the course of the last 18 months and it’s hard to predict what rates will be on offer in autumn and beyond.”

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