In an era of economic uncertainty, one thing is clear: UK households are holding onto their cash. Whether driven by caution, habit or a lack of better options, savings have surged over the past decade.
Figures from the Bank of England show household deposits and savings have now topped £1.9tn, almost double the amount from 10 years ago.
Recent financial market volatility, fuelled by geopolitical tensions and trade wars, has left savers navigating unfamiliar territory.
Combined with rising interest rates — from a record low of 0.1% in 2020 to a 16-year high of 5.25% — the UK’s longstanding attachment to cash is understandable.
Putting money aside for a ‘rainy day’ has always been vital for financial security, but cash also offers broader benefits: providing liquidity, stability and a buffer against market turmoil.
Simon Merchant, co-founder and CEO of cash deposit platform Flagstone, says: “The sheer size of the UK savings market alone confirms that cash is recognised universally as a necessary component of any individual’s financial situation.
“For advised clients and investors specifically, it forms an essential part of any well-diversified portfolio. It is an inevitable and low-risk asset class generating consistently competitive risk-adjusted returns.”
Sleeping savings
Despite its importance, the cash savings market has long been inefficient. Manually tracking accounts, moving money and responding to changing rates has traditionally been time-consuming and ineffective.
It’s no surprise, then, that £1.3tn is currently sitting in low-interest accounts — £280bn of which earns no interest at all, according to the latest Bank of England data.
“The reason why the vast majority of UK savers are not maximising the interest-earning potential on their savings is universal: inertia,” explains Merchant.
This inertia, combined with inflation, erodes the spending power of idle cash over time, potentially causing real harm to those with large balances in low-paying accounts.
Against this backdrop, financial advisers have a growing responsibility to help clients manage cash holdings more strategically and earn competitive returns.
Making money work harder
Cash management platforms are proving to be one of the most effective tools for this. While the savings industry has traditionally been slow to embrace innovation, the tide is turning.
Today’s clients expect visibility, control and convenience. Advisers are responding by integrating cash management technology that enhances efficiency and delivers tailored, data-driven insights.
According to a Flagstone adviser poll, 86% of advisers are offering more cash management advice than last autumn, with 30% seeing higher client demand and a third noting increased interest in keeping money in cash.
“The most active savers expect a lot from their cash, watching rates to ensure they capture the best interest-earning potential and spreading savings to protect them from bank failure,” says Merchant.
Cash management platforms like Flagstone leverage technology to provide access to a panel of over 60 banks, enabling users to spread their cash across multiple accounts and potentially secure more attractive interest rates.
For advisers, this means they can seek optimal rates, liquidity and tax efficiency for each client, without the administrative burden previously associated with cash management.
These platforms are especially beneficial for clients with larger balances, helping them stay within the Financial Services Compensation Scheme (FSCS) limit of £85k per institution.
“These tools fight inertia,” says Merchant. “By creating a really seamless, frictionless way to manage your cash, these platforms help savers take control of their money and maximise its value.”
In short, the ease with which platforms move funds between accounts can be transformative, removing barriers to action for advisers and savers alike.
Flagstone’s integration with back-office provider intelliflo is one example. It enables advisers using intelliflo to see the performance of their clients’ existing Flagstone cash savings from their own intelliflo dashboard, creating real-time reports, and making recommendations on their ongoing management.
This supports real-time reporting, enables proactive financial planning and helps advisers recommend timely changes.
“Financial advisers have always known the value of cash as a portion of their clients’ financial positions, but until recently it’s been almost impossible for them to view, manage or advise on these cash holdings on their clients’ behalf.”
Meaningful client interactions
Striking the perfect balance of human interaction and technology means advisers can build more meaningful relationships with their clients, enhancing the level of trust, service and ultimately, satisfaction.
According to Flagstone’s latest poll, 60% of advisers say clients value their advice more than ever, highlighting the growing importance of building these relationships.
Embracing automation also enables advisers to spend more time on high-value activities. In fact, 53% of advisers are seeing more demand for additional services from existing clients, while 55% report increased demand for advice from new clients.
By striking the right balance between technology and human interaction, advisers can deepen client relationships and focus on what truly matters.
Automation takes care of the routine, while digital platforms give clients the real-time visibility they expect — empowering advisers to have more meaningful, high-impact conversations.
Still, not all platforms are created equal. Advisers need to assess how many providers are available on a platform, whether cash is automatically reinvested after an account matures, and if clients can pre-select future savings destinations.
According to Merchant, higher net worth clients must have the opportunity to spread their cash between multiple savings providers to remain within the FSCS protection, so a platform with a small number of providers on its panel may not be sufficient.
Robust Know Your Customer (KYC) controls are also critical, not only for compliance but for ensuring a smooth experience throughout the client journey.
“Advisers must periodically confirm their clients’ details and ensure continued compliance with industry-wide KYC regulations, all while continuing to provide a seamless customer service,” he explains.
A successful business isn’t built on returns alone—it’s built on relationships. By simplifying the process of cash optimisation, platforms empower both advisers and their clients, allowing money to work harder with minimal effort.
For more information, please visit: www.flagstoneim.com
In an era of economic uncertainty, one thing is clear: UK households are holding onto their cash. Whether driven by caution, habit or a lack of better options, savings have surged over the past decade.
Figures from the Bank of England show household deposits and savings have now topped £1.9tn, almost double the amount from 10 years ago.
Recent financial market volatility, fuelled by geopolitical tensions and trade wars, has left savers navigating unfamiliar territory.
