In May, bill payers in the UK withdrew money from their bank and savings accounts at an unprecedented rate, leading to concerns from charities about the ongoing high cost of living. According to the Bank of England, there was a net withdrawal of £4.6 billion, the highest level recorded in the past 26 years.
Richard Lane, the director of external affairs at debt charity StepChange, emphasized the importance of supporting individuals in building up savings to withstand unforeseen expenses. This latest figure represents a significant shift from April, when net deposits increased by £3.7 billion in bank and building society accounts.
When factoring in savings held in National Savings and Investment accounts, the overall net withdrawal from accounts in May amounted to £3.8 billion, contrasting with a £5.3 billion increase in April.
Criticism has been directed towards banks for offering meagre interest rates to savers and failing to pass on the higher Bank of England base rate through improved returns on savings.
Chancellor Jeremy Hunt has expressed concern over the delay in passing on interest rate increases to savers, stating that it is taking too long to address this issue. He specifically mentioned that people with instant access accounts are particularly affected and emphasized the need to find a solution.
To address the tax issues, the chancellor has decided to freeze the income tax personal allowance at £12,570 until April 2028. Furthermore, the chancellor has also frozen the thresholds at which higher tax rates kick in, and the highest tax rate threshold was actually reduced in April.
Richard Lane, the director of external affairs at debt charity StepChange, emphasized the importance of supporting individuals in building up savings to withstand unforeseen expenses. This latest figure represents a significant shift from April, when net deposits increased by £3.7 billion in bank and building society accounts.
When factoring in savings held in National Savings and Investment accounts, the overall net withdrawal from accounts in May amounted to £3.8 billion, contrasting with a £5.3 billion increase in April.
Criticism has been directed towards banks for offering meagre interest rates to savers and failing to pass on the higher Bank of England base rate through improved returns on savings.
Chancellor Jeremy Hunt has expressed concern over the delay in passing on interest rate increases to savers, stating that it is taking too long to address this issue. He specifically mentioned that people with instant access accounts are particularly affected and emphasized the need to find a solution.
To address the tax issues, the chancellor has decided to freeze the income tax personal allowance at £12,570 until April 2028. Furthermore, the chancellor has also frozen the thresholds at which higher tax rates kick in, and the highest tax rate threshold was actually reduced in April.