During recent research, Virgin Money has discovered that people are still storing cash in the old proverbial ‘biscuit tin’ at home. The people doing this are missing out on vast amounts of interest, not only that, inflation is eating into the value of that cash sitting doing nothing in a box in someone’s home.
Virgin Money are estimating that £3.5billion in cash could be found lurking in these ‘tins’ in homes up and down the country. This amount is equivalent to 5 Wembley Stadiums, or 1000 police officers’ annual salaries!
Based on the figures already mentioned, British people keeping cash this way at home are missing out on £174 million per annum (a figure which could pay for 5,400 nurses in full time employment.)
The most common reason for saving in this way is to keep this money out of the tax man’s reach, well, if the money was placed into a mini cash ISA, which as we know everyone is entitled to have and is completely tax free, after 5 years the interest would grow to a startling £877million (based on current day rates and market trends).
If the £3.5billion cash had been invested into the top 10 stocks, the capital gain would have been £2.6billion. In comparison, this figure is more than 3 times the cost of the new Wembley Stadium.
The research figures conclude that currently 1 in 6 British people choose to hide money in various locations within their home rather than putting it into a bank. 15% own up to keeping up to £1,000 at home last year, and 2% admit they kept up to £5,000.
What reasons could they possibly have for doing this? Well, 6% say it is to hide money from their partners, 4% do not trust banks/financial institutions and 1% said they were hiding it from Gordon Brown!
Some do literally hide the cash in a biscuit tin, while others put it under floorboards or a bed mattress, while some even store it in the fridge!
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