The rainy days Britons have been saving for appear to have arrived and have turned into a prolonged downpour.
Bank of England (BoE) calculations show that Britain’s households and businesses have accumulated a record £1.9tn in savings, nearly double the amount saved a decade ago.
Yet this apparent financial strength masks a deeper problem that demands urgent attention from every business leader and individual saver.
BoE research indicates banknote circulation has jumped 23% since the pandemic, even as cash transactions plummeted to 12% of all payments.
While economic uncertainty drives this cash hoarding, a staggering £1.3tn earns “suboptimal” interest rates, below 2%, with £280bn earning no interest whatsoever, according to Bank of England research.
“Over 70% of these assets sit with just nine banks,” says Claire Jones, head of strategic relationships at Flagstone. The scale of this so-called “savings inertia” represents a critical strategic challenge.
Platforms like Flagstone have emerged to address this trillion-pound problem. They act as a single gateway to multiple banks and enable users to access hundreds of savings accounts from dozens of banks through one interface while maintaining the Financial Services Compensation Scheme (FSCS) protection of £85,000 per institution where eligible.
“Five years ago, hardly anyone knew what a cash platform was,” says Jones. Today, with over £16bn in assets under administration and thousands of users, Flagstone represents how technology can democratise what wealthy people and institutions have always done: spread cash strategically.
Cash finds its place in tomorrow’s portfolio
Jones argues that the near future promises a fundamental shift in how individuals and businesses think about cash management.
This transformation is already reshaping professional wealth management. “Cash has become a tool within portfolios where it wasn’t a decade ago,” says Olivia Wingrove, senior portfolio manager at LGT Wealth Management.
“What’s great now is that the toolkit has expanded because you have cash or cash-like instruments, such as liquidity funds that may provide a yield.”
For financial advisers, this evolution is reshaping client relationships. Hannah Pugh, investment product manager - third party solutions, at St James’s Place (SJP), says cash has become a strategic focus.
Notably, Flagstone research shows 86% of advisers are actively advising on cash more than they were last autumn.
SJP partners with Flagstone to offer a white-label platform, SJP Cash Deposit Services, tailored specifically for all SJP adviser practices and their clients. The technology enables advisers to provide something previously unavailable: a real-time view of a client’s entire cash portfolio.
“The platform allows them to have visibility of clients’ cash holdings, whereas previously they would have relied on clients getting bank statements,” Pugh continues.
For advisers, this technology revolution transforms client relationships. “It improves trust and engagement with our clients,” Pugh says. “It allows them to offer holistic financial planning beyond just company-specific products.”
Barriers to better money management persist
Despite obvious benefits, psychological and practical obstacles remain formidable. Rebecca Williams, divisional lead at Rathbones, one of the UK’s leading wealth and asset management companies, observes how even financially sophisticated friends struggle with basic cash management.
Many admit their money sits earning poor rates simply because life gets in the way; juggling teenage children, elderly parents and mortgage payments leaves little time for optimising savings.
The generational divide proves stark. Williams describes nonagenarian clients with hundreds of thousands of pounds earning nothing, paralysed by trust in banks they’ve used for decades.
At the other extreme, younger generations increasingly turn to social media for financial guidance, a worrying trend given the lack of proper financial education in schools.
This dangerous knowledge vacuum leaves young savers vulnerable to poor decisions, just as older generations remain trapped by institutional loyalty.
The stakes are considerable. Research shows one in 10 people have no cash savings at all, while another 21% have less than £1,000 to draw on in an emergency.
“If they lose their jobs, they’ll quickly find themselves in a very difficult situation,” Williams says.
Barriers prove even more daunting for businesses, particularly charities and SMEs. Scott Newman, regional director at Charities Aid Foundation (CAF), explains that many organisations struggle with fragmented cash management and limited banking options, often missing opportunities to optimise returns.
This institutional friction carries real costs for organisations that depend on maximising every pound.
Newman cites practical examples: a donkey sanctuary that employed a fundraising manager from improved returns, and a Scottish hospice that used better cash management to hire an additional nurse. “That’s an extra person looking after your loved ones in their last few days,” he adds.
Technology as an enabler and educator
Newman states that the solution lies in platforms that simplify what was previously complex.
CAF is a partner with Flagstone, and he draws parallels to familiar consumer behaviour: “Using a cash management platform is akin to using a comparison website for car or home insurance.”
Cash platforms make it easy to manage cash so that it is frictionless, time-saving and gives you the best return while ensuring protection
For advisers, this technology revolution transforms client relationships. “It improves trust and engagement with our clients,” Pugh says. “It suggests they’re able to offer holistic financial planning beyond just company-specific products.”
Jones believes that attitudes are shifting as interest rates become dinner table conversation. “It’s a topic of conversation that probably wasn’t prevalent years ago,” she says.
The experts offer clear guidance for business leaders seeking to combat savings inertia. Williams emphasises improving awareness and financial education. “Be really conscious about what you’ve got in cash and where it is, ensuring you’re getting the best rate possible.”
Jones urges a mindset change in cash management, embracing technology, and advocating for platform simplicity.
“Cash platforms make it easy to manage cash so that it is frictionless, time-saving and gives you the best return while ensuring protection,” she says.
Aside from the benefits of having more money in the bank, Newman emphasises the time-saving element tech solutions offer for cash-savvy organisations and individuals. “You can fill out one application and access multiple savings accounts,” he says. “Once it’s done, it’s done.”
Wingrove’s advice is most direct: “Whether you’re an individual or business leader, it’s important to make your money work harder now, as this can help you achieve your goals.”
The technology exists to transform how Britain manages its cash. That simplicity might prove the most valuable innovation for a nation sitting on nearly £2tn in savings while worrying about rainy days.
The rainy days Britons have been saving for appear to have arrived and have turned into a prolonged downpour.
Bank of England (BoE) calculations show that Britain's households and businesses have accumulated a record £1.9tn in savings, nearly double the amount saved a decade ago.
Yet this apparent financial strength masks a deeper problem that demands urgent attention from every business leader and individual saver.
BoE research indicates banknote circulation has jumped 23% since the pandemic, even as cash transactions plummeted to 12% of all payments.
