THE AMOUNT of money that British people are saving has fallen by more than £7bn in the last year alone, which EasyMoney says is “worrying” due to the UK’s uncertain economic future following Brexit.
The peer-to-peer lender, which is part of Sir Stelios Haji-Ioannou’s easy family of brands, cited Bank of England data that showed the net value of new deposits into savings accounts fell by 16 per cent to £36bn over the past year and is down by 41 per cent from £60.6bn just two years ago.
EasyMoney said that people are being put off by sub-inflation interest rates on savings accounts that mean the value of their assets are being eroded all the time.
Read more: EasyMoney calls for cash ISA risk warning
The lender added that this was concerning in the current political environment and suggested that people might want to save more to build a cushion in case their incomes are impacted by Brexit.
“With interest rates at rock bottom for almost a decade, it seems that British savers are losing interest in the old-fashioned cash savings account,” said Andrew de Candole, chief executive of EasyMoney. “And can you blame them?
“What is the point of putting your heard-earned money in an account where miserly rates and inflation will eat it away? The current rates are barely better than putting it under the mattress.”
EasyMoney said that people looking for more than the paltry interest rates on offer in cash savings should consider investing in an Innovative Finance ISA (IFISA) instead – the tax wrapper around debt-based securities included P2P loans.
EasyMoney acquired the business of specialist short-term property lender Tower Bridging and makes loans to property professionals secured by a first legal charge over UK property. It launched in February with an IFISA and launched a second IFISA in March.