ISAs & PEPs news
Stashing the cash
30 April, 2007
ISAs are ever growing in popularity, but even the tax breaks aren’t enough to discourage some Brits from keeping their money ‘safe’ under the mattress or in the biscuit tin
Those keeping their cash at home have collectively stockpiled a huge £3.5 billion – the same amount as the entire GDP of the Bahamas.
This might seem like the safest option, but inflation is eating away at these homeowner’s precious savings with each passing day. According to inflation forecasts, this £3.5 billion will lose around £200 million worth of purchasing power if kept there until 2010.
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The ever-diminishing sum of money could start battling against inflation when put into a savings account as the interest on this tidy sum could amount to £174 million each year.
The reasons behind these cash stashes are wide-ranging; some are simply trying to beat the taxman, while others are hiding it from their partners or keeping it close because they don’t trust their bank.
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One in six Brits hide money at home for ‘safe-keeping’, with 15 per cent stashing up to £1,000 and another 2 per cent keeping as much as £5,000 under their mattress.
Keeping cash at home is not wise in any scenario, especially if you live in an area which experiences a high amount of burglaries. John Franklin, a spokesperson for Virgin Money said: “If your biscuit tin is full of cash, it’s time you bought some custard creams and put the rest of the money somewhere it can grow.”
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