Growth in the overall amount of savings in UK bank accounts has ground to a halt, new research by Paragon Bank has indicated.

Analysis of the CACI database by Paragon for savings deposits in May found that overall savings increased by only £7m to £994.712bn – compared with a £2bn rise recorded in April to £994.705bn.

Prior to May’s limited savings growth, CACI figures for 2022 had shown monthly rises of between £2bn and £4.5bn between January and April.

Paragon also highlighted that the new figures showed the amount held in accounts offering rates of 0.1% or less remained at over £300bn – after this figure fell to £304bn in May compared to £329bn in April.

Following several Bank of England base rate rises, the overall deposits held in accounts offering over 0.1% has increased by over £122bn since January, rising from £194.2bn at the start of the year to £316.7bn in May’s figures. Furthermore, accounts with £100 or less in savings increased marginally in May, to 36.55% of the volume of all accounts, in comparison to 36.32% recorded in April.

“With inflation starting to eat into people’s pay packets and pensions, it is unsurprising that savings growth has slowed – but it will take longer to see if this is the start of a long-term trend,” commented Paragon savings director, Derek Spawling.

“May’s fall draws further attention to the need for savers to seek the best options for both their savings and their circumstances.

“It is also concerning to see that over £300bn continues to rest in accounts offering only 0.1% or less, especially at a time when savers could be doing more to potentially protect their savings from the rise in inflation.

“I continue to urge savers to explore the options available to them and find the right products for their circumstances, including ISAs, and take an active approach to their savings and to look further than the rates offered by high street providers.”

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