£3.5b cash stash 'losing value'

Brits stash £3.5 billion in mattresses, under floor boards and in the fridge instead of putting the money to work in a savings account, according to Virgin Money.


One in six Brits admit to keeping cash around the home instead of putting into a bank account where it could be accruing £174 million a year in an average internet savings account.

One per cent of Britons said they stored up to £1,000 in their house while two per cent claimed to have up to £5,000 lying around.

And while their money languishes under the mattress, it is losing purchasing power as inflation marches on.

By 2010, the £3.5 billion of cash which is not in savings accounts could depreciate by £200 million.

While inflation means that home stashes lose value, savers have seen their savings grow at a faster rate. Following inflationary rates of more than three per cent in March and the accompanying rise in interest rates, many banks have also raised the interest they are paying out on savings accounts.