Billions of Pounds Sitting Uninvested in British Bank Accounts and ISAs

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New research reveals that British adults are sitting on a staggering £721 billion of “dead money,” stashed away in bank accounts and Individual Savings Accounts (ISAs). The findings, unveiled by Nutmeg, a leading financial advisory firm, suggest that the average UK adult aged 18 and over has accumulated a substantial £14,049.30 but lacks any concrete plans for its use.

Furthermore, the study reveals that one-third of respondents have up to £250 in cash hidden within their homes, with one in ten holding over £1,000 in secret reserves. An even more astonishing statistic is that one in five adults possesses a personal pension pot worth more than £20,000, which they are no longer contributing to.

Commenting on these findings, Lisa Caplan, Head of Financial Advice for Nutmeg, emphasized the need for people to make smarter financial decisions. She noted, “As this survey shows, people are literally sitting on their money, with no real plans on how to spend it, save it, or invest it. While saving money is obviously a sensible thing to do, there are ways of being even cleverer with cash.”

The prevailing notion that depositing money into a bank account is the most prudent financial choice is challenged by Caplan. She pointed out that many accounts offer limited opportunities for growing one’s wealth, making alternative strategies, such as investing, potentially more profitable. “Sometimes making a few wise decisions with money – such as investing – can really pay off,” she added.

The study, which polled 2,000 participants, revealed that over 70 percent of respondents considered their savings as a safety net for rainy days, and more than half admitted they “don’t really know” why they have accumulated these sums. Furthermore, one in ten respondents has an old Post Office or current account dating back to their childhood, holding an average of £293.35.

In addition to these findings, the research indicates that seven out of ten individuals own up to three store cards, collectively worth just under £90. An even more substantial portion, 39 percent of adults, have old pension pots from previous jobs, some exceeding £16,000, but they remain unaware of how to access these funds.

A significant number of Brits are uncertain about the purpose of their savings, with a third acknowledging that they don’t have a clear goal. However, 92 percent of respondents expressed a preference for having a financial cushion for unforeseen emergencies.

Among those with specific plans for their savings, 35 percent consider it a retirement safety net, while the same percentage allocate funds for unexpected bills. Three in ten respondents are saving for a vacation, and 18 percent maintain a financial buffer to guard against job loss. Other objectives for saving include home renovations, purchasing a new car, and accumulating a property deposit.

Interestingly, some individuals opt to keep their money at home rather than depositing it in banks. Bills, treats, and holiday expenses are cited as the primary reasons for this choice, with 7 percent keeping money at home to conceal it from others and an equal percentage expressing distrust in the banking system.

The study also uncovered the existence of “lost pension pots” from previous employment or discontinued personal contributions. Four in ten respondents were aware of having contributed to a pension through work at some point, but 17 percent have lost all relevant paperwork, 21 percent are unsure how to access their pensions, and 24 percent have no idea about their entitlements.

Despite the substantial sums held in accounts nationwide, only 41 percent of respondents have concrete plans for their funds, and just 38 percent have considered investing their savings. When asked about their hesitancy to invest, 37 percent cited a lack of knowledge about the stock exchange, while 28 percent expressed uncertainty about where to begin.

Dawn Jackson
Dawn Jackson
Journalist Dawn is an experienced business journalist specializing in regional coverage across the United Kingdom. With a keen eye for detail and a passion for uncovering stories that impact local communities, Dawn brings a unique perspective to her work. Through her insightful reporting, she keeps readers informed about the latest developments in various regions, shedding light on the economic landscape and entrepreneurial endeavours. Dawn's dedication to delivering accurate and engaging business news makes her a valuable asset to the News Write Ups team.

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