Billions in unprotected cash left in UK homes
New research from the Financial Services Compensation Scheme (FSCS) has found that more than £5.6 billion in cash is left unsecured in people’s homes in the UK.
The research, which questioned close to 1,000 individuals, found that the average amount kept at home is just under £218, excluding any money kept in wallets. This equates to more than £5.6 billion in unsecured cash across the UK’s 26 million homes.
Although 33 per cent of those surveyed kept less than £20 at home, 3 per cent kept in excess of £1,000 which could be at risk in the event of a house being damaged, as those with top insurance policies may only be covered for up to £1,000 in cash.
The FSCS attributed the large sums of cash kept at home to the fact that one in ten surveyed – 13 per cent of those questioned – believed that their money was safer at home as opposed to a bank or building society.
The research comes after a number of financial institutions were recently fined for not informing consumers clearly about what the FSCS can and cannot cover. The deposit guarantee scheme, run by the FSCS and backed by the UK Government, covers up to £85,000 of cash deposits in the event of a financial service collapsing or going bust.
Mark Neale, chief executive of the FSCS, said: “It is encouraging that people are keeping less money at home than they did in 2011. In part this may be because people have less spare cash than they did 12 months ago, but hopefully it also reflects the fact they recognised it is safest in a bank, building society or credit union which is protected by the FSCS. We protect all savings up to £85,000 per person per firm, which means that 99 per cent of the population are covered.
“Even though rates are currently low, all cash up to the limit is safe in an authorised financial institution. By contrast, any cash which is kept at home receives no interest, and may not be covered by household insurance and so could be lost if the house is damaged. If a bank or building society was to fail most customers would get their money back in less than a week.”