British adults have £721BILLION of ‘dead money’ sitting in bank accounts and ISAs, according to new research.
The average person aged 18 and over has saved £14,049.30 – but has no plans on what to do with it.
In addition, a third have up to £250 in cash hidden at home, while one in 10 has over £1,000 tucked away.
And one in five has a personal pension containing more than £20,000 – which they no longer pay into.
Lisa Caplan, head of financial advice for Nutmeg, which conducted the study, said: “As this survey shows, people are literally sitting on their money, with no real plans on how to spend it, save it, or invest it.
“While saving money is obviously a sensible thing to do, there are ways of being even cleverer with cash.
“A large amount of people tend to assume that just popping money into the bank makes the most financial sense, but with few accounts offering ways of increasing that sum of money, that might not be the case.
“Sometimes making a few wise decisions with money – such as investing – can really pay off.”
Over 70 per cent of 2,000 people polled said their savings are for a rainy day, and more than half admit they “don’t really know” why they have the money put aside.
One in ten has an old Post Office or current account which was opened for them as a child, containing an average of £293.35.
In addition, seven in 10 people own up to three store cards worth just under ninety pounds.
And 39 per cent of adults have an old pension pot from a previous job worth more than £16,000 – but the majority have no idea how to access the money.
A third of Brits don’t really know what they have money set aside for, while 92 per cent just like to have money to fall back on should they need it.
Of those people who do have plans for their money, 35 per cent regard it as a retirement safety net and the same percentage have money set aside for unexpected bills.
Three in 10 are saving for a holiday, while 18 per cent have a buffer just in case they lose their job.
House renovations, a new car and a deposit for a property are other reasons people actively save.
And for those people hiding money at home, bills, treats and holiday money are the key reasons why the cash doesn’t make it to the bank – while seven per cent keep money at home to hide it from people and the same percentage don’t trust the banks.
Researchers also found a large number of people have a ‘lost pension pot’ either from a previous employer, or because they’ve stopped actively putting money aside themselves.
Indeed, four in 10 know they used to pay into a pension with work, but of these 17 per cent have lost all relevant paperwork, 21 per cent don’t know how to access the pension and 24 per cent have no idea how much money they are entitled to.
Despite the large amounts of cash sitting in accounts up and down the country, only 41 per cent have very firm plans on what to do with the money and only 38 per cent of Brits have considered investing their savings.
When asked why they hadn’t thought about investing, 37 per cent say it’s because they have no knowledge of the stock exchange, while 28 per cent say they wouldn’t know where to start.
Lisa Caplan added: “You don’t need to be an expert to start investing. And don’t think you need to have a fortune, either. Just start with something, and then keep topping it up over time – even if it’s only a little bit. Something is better than nothing. Your future self will thank you for it.”