According to a new study, British savers are concerned that their savings could be devalued if the Bank of England (BoE) were to introduce negative interest rates.
Recommendations from the Bank of England to banks to prepare for negative interest rates has certainly spooked some savers, but the research suggests that many have been losing confidence in traditional financial institutions for some time.
Conducted by the financial comparison website, NerdWallet, the study of 2,000 UK adults found that 38 per cent of savers have been saving less since interest rates dropped to 0.1 per cent in March 2020, with up to 23 per cent deciding to spend more instead.
Of those surveyed, 18 per cent said they did not feel their money was secure in a bank, while 47 per cent said they might withdraw part or all of their savings should interest rates turn negative.
Despite fears over money held in banks, the study found, that on average, UK adults have around £15,157 in savings at the moment.
While there are concerns about negative interest rates, NerdWallet’s research suggested other external factors are impacting savers’ confidence, with Brexit and Coronavirus altering the long-term investment plans of many individuals.
Although the BoE base rate remains minimal at this time, 52 per cent of respondents have been actively searching for a savings account that offers a better interest rate than their existing one in the last year.