The biscuit tin economy
- Five Wembley Stadiums or more than the Entire GDP of The Bahamas, stashed at home!!!
- Equivalent to 1000 Policemans’ Annual Salary
Research commissioned by Virgin Money has revealed that Britons have a staggering £3.5billion in cash currently stashed at home.
This aptly entitled ‘Biscuit Tin Economy’ is costing Brits a fortune in the pocket – as the attack of inflation means the value of their cash crumbles away the longer it’s left there. According to a forecast of future inflation based on market interest rate expectations, £3.5billion in cash stored away from now until 2010 would lose around £200 million pounds worth of purchasing power.
Brits are also missing out on a staggering £174million in interest payments a year - Or the equivalent of paying 6,600 full time nurses. And if Brits think they are cheating the taxman by keeping their money hidden under floorboards – they aren’t – they are only cheating themselves. If Brits were to put that money back into mini cash ISA’s, interest after five years would balloon to £877million according to current market interest expectations.
And if it’s stocks and shares you want to dabble in – had Brits invested the £3.5billion in the top ten stocks, the capital gain would have been £2.6 billion – that’s more than three times the price tag of the new Wembley stadium!
1 in 6 Brits admit to being part of the ‘Biscuit Tin Economy’ rather than putting it safely in the bank with 15% admitting to keeping up to £1,000 in their homes last year and an astonishing 2% keeping up to a staggering £5,000.
But why are they risking such large amounts of money? The research shows that 6% are hiding it from their partners, 4% don’t trust their banks and 1% are hiding it from Gordon Brown.
Perhaps more surprising than their reasons for stashing it, is the bizarre locations that the secret stash is kept. These ranged from under the floorboards or mattress to in the fridge!
Dr Alexander Koch, financial economist at Royal Holloway University who carried out the research commented “Keeping cash at home is not wise: the British are throwing away the opportunity to easily earn several hundreds of million pounds over a few years.”
John Franklin of Virgin Money said “If your biscuit tin is packed with cash, not custard creams, it’s the right time of year to think about investing your money.”
- Wembley cost £800m as reported on the BBC http://news.bbc.co.uk/1/hi/england/london/6500161.stm
- Dr Alexander Koch, Royal Holloway University
- Based on saving £3.5billion in an average internet operated deposit account, at an interest rate of 4.97%
For more information, contact Reema Babakhan or Emily Eve at Frank reemababakhan@frankpr.it or emilyeve@frankpr.it or 0207 693 6999
Notes to editors
- All statistics based on analysis by Dr Koch of tickbox (independent market research) survey commissioned by Virgin Money, undertaken in February 2007
- Virgin Money is Virgin’s financial services arm and was established in 1995.
- Virgin Money has over two million customers and offers a wide range of financial products across lending (e.g. credit cards and personal loans), savings (e.g. deposits, investments and pensions) and protection (e.g. life insurance, home insurance and car insurance) to the UK market.
Virgin Money Personal Financial Service Ltd is authorised and regulated by the Financial Services Authority. Registered office: Discovery House, Whiting Road, Norwich NR4 6EJ. Registered in England No. 3072766. Entered on the Financial Services Authority's register number 179271.
