Millions Risk Losing Thousands as Inflation Erodes Cash Savings

Savers in the UK are being warned about a common mistake that could be quietly eroding their wealth. According to Quilter, a £10,000 pot left untouched since the end of 2010 would now have spending power equivalent to roughly £6,300 when inflation is factored in.

This means that over time, the gap between what people think they have and what it's actually worth can become enormous. In fact, Quilter calculates that if the same £10,000 had been invested in global shares, it would be worth close to £25,000 today, representing a potential difference of around £15,000 compared to doing nothing.

The investment firm points out that Bank of England figures show £303 billion of household cash is currently sitting in accounts earning zero interest, which is 60% higher than at the start of the pandemic. This suggests that millions are effectively keeping their money 'under the mattress' by letting it languish in current accounts or low-interest savings rather than thinking about longer-term options.

Jo Harris, chief customer and operations officer at Quilter, emphasized that cash plays an important role in personal finances but should not be the only consideration. She noted that investing in shares can go down as well as up, but is generally better suited to money you won't need in the near future.