Householders who can’t be bothered to go to the bank have £7 billion in often unprotected cash lying around their homes.
The irony is many of these hoarders do not trust the banks to keep their money safe, but their home insurance probably covers losing just £500 in cash.
Meanwhile, the free Financial Services Compensation Scheme (FSCS) protects up to £85,000 a saver has on deposit with any one bank.
In the long run, the 5% of Brits who keep more than £1,000 cash at home risk losing their savings in the event of a fire, burglary or other disaster, while a neighbour who puts their £1,000 on deposit in a bank will be paid full compensation if the bank fails. Mark Neale, FSCS Chief Executive, said: “Even though rates are currently low, those wishing to save money should always do so with a bank, building society or credit union which is covered by the Financial Services Authority. It is vital that savers know their money is protected up to the new limit of £85,000.
Home insurance may not pay out for lost or stolen cash”
By contrast, those deciding to keep money at home, whether as savings or for convenience, may not be covered by household insurance in instances such as burglary. Under new rules, if financial institution were to fail most customers will get their money in a few weeks, so there really is no need to stash it at home.”The FSCS polled more than 1,000 householders to highlight customer awareness over the compensation scheme.
The survey revealed more than one in ten (13%) people keep all their cash at home – and that rises to almost a fifth of those aged between 16 and 34 (18%).
Some (1%) said they keep more than £10,000 at home, while many (37%) said they had less than £20.
On average, each of Britain’s 24.9 million homes has £280 in notes and coins lying around. This is on top of everyday spending money in pockets, wallets and purses.
Householders blamed doubts about the safety of banks and poor returns on savings because of low interest rates as the main reasons for not using banks.