More than half (51%) of active savers increased their overall balance during the COVID pandemic, new analysis by Paragon Bank has highlighted.

The bank suggested that many savers had added to their balances against the backdrop of increased uncertainty and that a majority have retained those savings for future use.

Paragon’s survey, which included 1,245 savers, revealed that over a fifth (21%) increased their savings by up to £4,999, with 12% increasing their savings between a £5,000 and £9,999. A further 16% increased their deposits by between £10,000 and £29,999 and just over 5% managed to increase their savings by £30,000. The remainder didn’t know the exact amount or preferred not to say.

The bank suggested that most savers who put money away during the pandemic still have their savings, with 71% of respondents still holding onto the nest egg they built up during the pandemic, and just 13% no longer having the money they put away.

“It’s positive that those already saving were able to increase their savings during the lockdown and that many still hold onto those balances today, helping to improve financial resilience, particularly as savings rates grew over the period, delivering better returns,” Paragon head of savings, Andrew Wright, commented.

Bank of England data has shown that the UK’s consumer savings have increased from £1.3trn in January 2020 to £1.8trn in March this year. The largest increase has been in non-ISA easy access accounts, growing by £138bn, followed by cash in earning zero interest, increasing by £117bn.

Paragon also stated that cash ISA balances swelled by £108bn over this period, with fixed rate non-ISA accounts increasing by £93bn.

“Another positive is the strong growth in cash ISAs, particularly as ISA balances were largely stagnant until 2022,” added Wright. “Increasing savings rates around that time encouraged many people to seek the shelter of the ISA tax wrapper.

“What is less positive is that current account balances that pay zero interest recorded the second strongest growth. That money could, and should, be earning a better rate of interest.”

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