Saving has increased exponentially during the pandemic. UK households have increased their deposits by more than £200 billion since March 2020 and the national savings ratio has climbed to historic highs in excess of 25 per cent.
In 2019, UK household saving had fallen to a near 50-year low, with the proportion of the nation’s disposable income which was being saved rather than spent, languishing at just 6.3 per cent. But since March last year, with restrictions having curtailed holiday travel, dining out and commuting costs for many, household deposits have increased to £1.33trn, with £245 billion held in accounts paying no interest.
Whilst the Bank of England’s Monetary Policy Committee forecasts that the savings ratio will stabilise at nearer 12 per cent (or £1.20 out of every £10 of disposable income) as restrictions begin to lift, it raises the question; could this forward looking, prudent mind-set, eschewing near-term consumption in favour of longer-term planning and financial security, become the ‘new norm’? Could this potentially be a seminal moment heralding a step change in the way people collectively think about saving and investing?
The events of the last eighteen months threaten to impact our lives in ways that we are yet to fully appreciate, but they have already initiated a behavioural change and could be the catalyst for a more permanent shift in the nation’s perception and prioritisation of saving, investing and making provision for the future, whatever it might hold.
With deposit account interest rates now increasing, ‘accidental’ savers with sums accrued over the last 18 months earning little or no interest should be pro-active, as the cost of inertia will begin to rise in the coming weeks and months. The Flagstone cash deposit platform enables clients to compare over 250 instant access, notice and term deposit accounts from up to 51 banks and move their money to FSCS protected products offering new, exclusive and market-leading rates in seconds. The platform gives financial planners and wealth managers visibility of their clients’ cash deposits (and maturities), and puts clients in the best possible position to take advantage of the prevailing tide of rising rates - growing and protecting their cash today, so that they can plan for tomorrow with confidence.
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If you're a wealth manager, financial planner or accountant and would like to refer clients to Flagstone, please click here or contact us. To discuss how we can support you and your practice in delivering optimal outcomes for your clients as part of your savings and investment proposition, contact us or call us on 0203 745 8130.
 Bank of England data - Money and Credit: [LPQZ3TT, LPQB5S9, LPMZOD5]
 Office of National Statistics - UK Households’ savings ratio
 Bank of England data [LPQB5S9]
 Correct as at 22 September 2021. Different banks, accounts and rates are available to clients on the platform dependent upon whether they are an individual, looking to open a joint account, or acting on behalf of a company, charity, trust, SIPP or SSAS. The number of accounts available to clients may also be reduced dependent upon their domicile, residency and other factors.
 For further information about Financial Services Compensation Scheme (FSCS) deposit protection limits please refer to https://www.fscs.org.uk/what-we-cover.