£325B Sits in Zero-Interest UK Accounts

- The amount of money in zero-interest accounts has significantly increased over the years; in October 2008, when the interest base rate was 4.5%, only £39 billion was held in such accounts. This figure grew to £154 billion by July 2019 and reached £231 billion during the COVID-19 pandemic. - In 2025, an estimated 6.5 million current accounts paying no interest held balances of over £10,000. The average balance in these accounts was £35,000. - Analysis has shown that a significant portion of the money in zero-interest accounts is concentrated in a smaller number of accounts with large balances. In 2025, accounts with over £10,000 in them held a total of £227 billion, which is 71% of all money in zero-interest current accounts. - Even a modest 3% return on the £230 billion held in zero-interest accounts a year prior to May 2025 could have generated £6.9 billion in interest for savers. Some easy-access savings accounts are currently offering rates of up to 4.5%. - The value of cash held in zero-interest accounts is eroded by inflation, which reduces its purchasing power over time. - For security, cash deposits in UK-regulated banks, including current and savings accounts, are protected by the Financial Services Compensation Scheme (FSCS). As of December 1, 2025, the protection limit increased from £85,000 to £120,000 per person, per financial institution. - For joint accounts, the FSCS protection limit is £240,000. It is important to note that some banking brands share a single banking license, meaning the £120,000 limit applies across all of a parent company's brands. - The FSCS also offers temporary protection for high balances up to £1.4 million for up to six months in certain circumstances, such as after a property sale or an inheritance.