Around half (49%) of instant access savings accounts contain less than £500, new figures have revealed.

Paragon Bank’s analysis of CACI’s database, which captures savings data from more than 30 providers, showed that 49% of instant access non-ISA savings accounts in January contained less than £500, rising to 55% containing £1,000 or less.

The analysis found that just under a third of accounts have over £1,000 and up to £25,000, with 12% of accounts containing more than that figure.

According to the latest CACI data, a high proportion of non-ISA instant access accounts are also earning interest below 0.1%. The figures revealed that 81% of easy access accounts by volume are earning less than 0.1%, and 68% by value, equating to £418bn.

Overall, savings balances declined slightly in January, falling to £986bn from £988bn in December. The average savings balance dipped by £50 to £12,526.

“With households dealing with rising costs across food, energy and clothing, it’s concerning that half of instant access non-ISA savings accounts contain less than £500,” commented Paragon Bank savings director, Derek Sprawling.

“This suggests that people may not have a great deal to fall back on to cope with rising costs, if indeed they have a savings account at all.

“We appreciate that times are difficult for many people but hope that savers are conscious of the peace of mind that maintaining a savings buffer can provide. It’s also important that if you do have money in a savings account, it’s working as hard as it can for you by achieving a good rate of interest.”

Sprawling added: “January savings balances overall experienced a slight dip compared to December, which is to be expected as people pay for Christmas spending and tax return payments fall due. It will be interesting to see how balances perform in subsequent months as household bills come under increasing pressure.”

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