More than £5.6bn in cash is stashed away in the UK’s homes, with one in 10 people believing their money is safer there than in banks, the savings compensation organisation has found.
Excluding wallet contents, people typically keep £218 at home, while about one person in 33 has more than £1,000 squirrelled away where they live, the Financial Services Compensation Scheme (FSCS) has revealed.
These hoards, kept under mattresses and in jam jars, are largely unprotected, with even top insurance policies only covering people for as much as about £1,000, the FSCS has warned.
The organisation said the current poor returns on savings, as the Bank of England maintains the base rate at a record low 0.5 per cent, should not put people off using accounts, where as much as £85,000 in savings per person per firm is protected.
It suggested the large sums being kept at home could be attributed to 13 per cent of those questioned believing their money is safer there than in banks or building societies.
However, people are hoarding less than a year ago – about £282 each – when a similar study took place.
But the FSCS, which protects savers when financial services firms go bust, said the decrease could be partly due to squeezed households having less spare cash generally.
FSCS chief executive Mark Neale said: “In these tough times, no-one can afford to lose any hard-earned cash. It is encouraging that people are keeping less money at home than they did in 2011.
He added: “In part this may be because people have less spare cash than they did 12 months ago, but hopefully it also reflects the fact they recognised it is safest in a bank, building society or credit union which is protected by the FSCS.”