UK current accounts hold £116bn in zero-interest balances, Spring analysis shows

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UK current accounts zero interest

Highlights

Spring analysis finds 1.04mn UK current accounts above £50,000 held £116bn in zero-interest balances at March 2026, averaging £111,537 each.
Of 91mn UK current accounts in credit, 87 per cent (79mn) pay no interest, highlighting extensive idle cash exposure amid persistent inflation risks.
Cash Isa inflows surged to £12bn in April, the second-highest on record, as savers accelerate contributions ahead of the allowance cut to £12,000 in April 2027.

Spring data highlights idle cash exposure

As reported by Spring, analysis based on figures from UK consumer data provider Caci finds that 1.04mn current accounts with balances above £50,000 are earning no interest at the end of March 2026. Those accounts hold a combined £116bn, with an average balance of £111,537.

The wider picture is also substantial. Of 91mn accounts in credit in March, about 79mn, or 87 per cent, pay no interest on balances, according to the research.

Derek Sprawling, head of money at Spring, says many savers are unlikely to realise how much they are giving up by leaving large sums in accounts that pay zero interest. He says convenience and habit are often the reason, but that missed returns become significant once balances reach £50,000 or more.

Alongside the data analysis, a Spring survey finds that 36 per cent of respondents keep their savings with their main current account provider, while 21 per cent keep savings in the current account itself. The company says habit, uncertainty and confusion are key reasons substantial sums remain in non-interest-bearing accounts.

Inflation pressure and savings alternatives

The inflation effect remains a central concern for households holding cash that earns nothing. According to the Bank of England's inflation calculator, goods and services costing £100 in 2016 would now cost £140, while the latest annual CPI inflation rate stands at 2.8 per cent after reaching 11.1 per cent in October 2022.

Savers can partly offset that erosion by moving money into accounts that pay interest, especially if they are willing to lock funds away for a fixed term. Finance website Moneyfacts puts the average easy-access savings rate at 2.5 per cent today, compared with 4.23 per cent for a one-year fixed savings account.

Cash Isa rates are only slightly higher, at 4.25 per cent for a one-year fixed account, but inflows have accelerated ahead of a planned cut in the annual cash Isa allowance to £12,000 from £20,000 in April 2027. Bank of England data shows savers put £12bn into cash Isas in April this year, the second-highest monthly inflow on record.

Charlene Young, senior pensions and savings expert at AJ Bell, says this year is the last in which under-65s can pay in up to £20,000 before the allowance is reduced. She also warns that inflation risks remain elevated, saying price pressures were already sticky before the Iran conflict and that further rises are expected as supply chain disruption and energy shocks feed through.

In our earlier article on Fora Financial’s Series 2026-1 asset-backed securitization, we explained how the lender returned to the ABS market with a $130 million deal across five note classes, with capacity to grow to $500 million during the revolving period. We also noted that the proceeds were intended to buy small-business receivables, fund reserves and expenses, and refinance prior notes, with eligibility and concentration limits designed to protect noteholders as the receivables pool expands.

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