Brits feel their homes safer than savings accounts

The Financial Services Compensation Scheme recently reported that one out of every ten Brits feel that keeping their money stashed in their homes is safer than depositing it in savings accounts, resulting with more than £5.6 billion stuffed in jam jars and under mattresses.

The FSCS, which provides a safety net for personal and business bank accounts in the event of a bank failure, said that the typical Brit has around £218 stashed at home excluding any money they have in their wallets.  The compensation scheme’s research also discovered that one out of every 33 individuals surveyed kept more than £1,000 tucked away in their houses, even though this cash goes largely unprotected, as most home insurance policies offer limited protection for lost cash.

People should not be put off by the relatively low interest rates on the nation’s savings products, said the FSCS, especially since the scheme protects up to £85,000 in individual assets in the event of a bank failure. Despite concerns of bank runs – such as the one on Northern Rock that precipitated the credit crisis and resultant economic recession – the FSCS did find that the amount of money Brits store at home has fallen overall, though the scheme said that the large sums of cash being hidden at home could be due to the responses of 13 per cent of those they surveyed, who felt that banks and building societies are no longer safe places to keep their money.

FSCS chief executive, Mark Neale, said that there are few of us that can afford to lose their cash in these tough economic times.  While he said that it was encouraging to discover that people are not keeping as much money at home than they did last year, he was unsure if this was because people recognise the safety a high street retail banking institution provides or if it could be attributed to people having less spare money than they did last year.

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