Press Releases

The Billion Pound Savings Black Hole

Jul 18, 2017

The billion pound savings black hole – how inflation is eroding Britain’s £60bn cash savings

• Brits stand to lose £870 per person due to the effects of inflation over 20 years
• BlackRock identifies ‘The Planners’ who are on course to beat the battle with inflation

LONDON, 18 July 2017: UK savers hoard over £60 billion* in cash for long-term savings and investments, which stands to be eroded by £1.5 billion this year as a result of higher inflation.

Inflation has seen this savings mountain eroded by £760 million so far this year. If inflation were to continue at the 2017 average (2.4%), another £760 million could be lost between now and the end of the year**.

According to BlackRock’s Investor Pulse survey, polling 4,000 people in the UK, savers typically have £8,700 in cash, of which a quarter (£2,270) is set aside for long-term savings and investments. Of this pot, they stand to lose £55 this year as a result of inflation***.

Brits believe their cash savings stand to be worth even less, with three quarters of people predicting that inflation is set to rise further in the next 12 months. Inflation compounded over 20 years would see the £2270 pot that Brits have set aside for long-term savings and investments depleted by over a third (£870) per person, amounting to over £20 billion for the nation****.

Jeremy Roberts, Head of UK Retail Sales at BlackRock, says: “It is encouraging to see that over a quarter of Brits’ savings has been earmarked for long-term savings and investment. This is outside of money set aside for monthly expenses, upcoming events and emergencies. However, there is still an emotional barrier that stops us from taking the leap out of cash and into investing. If UK savers had invested their £2,270 pot of cash in the FTSE All Share over the last 20 years, it would be worth £8,350 today. Even if they were to have invested a quarter of their pot in the FTSE All Share, they would still be £1,525 better off*****.

“While we all struggle to make plans 20 or 30 years ahead, resigning all our money to cash is not the answer. We are approaching a decade of record low interest rates which have been giving us little to no return on our money. We have to decide whether we are prepared to watch our money erode away, or try and grow our savings through investing.”

Why are the Pinched the most exposed to inflation?
BlackRock has identified a particularly vulnerable group of 16.5 million people in the UK with savings who will be worst hit by the rising cost of living, as they have no intention of moving any or any more of their money into investments. The Pinched are least likely to feel in control of their financial futures, and only one in five feel knowledgeable about investing.

Their dependency on cash is largely driven by their need to have quick access to their money (34%). Three in ten believe that the amount of cash they have is too small an amount to be worth investing, while a further three in 10 prefer to keep their money in cash to act as a safety net (28%).

Who are the Pausers?
There are a further eight million savers in the UK who are committed to staying in cash, saying that they have decided now is not the right time to be moving any more of their savings out of cash.

The Pausers’ reluctance to move any or any more of their savings out of cash has largely been driven by worries about market volatility (32%), and compounded by their nervousness about investing (25%). A guarantee that their capital is protected is the greatest incentive for them to take any further money out of cash and into an investment.

The Planners
The survey identifies three million savers in the UK who are most likely to beat the battle with inflation. This group has seriously considered moving some of their money out of cash and plan to do so in the next six months.

The Planners say that low savings rates and their fundamental belief that returns on investing are better over the long term are the main reasons why they are planning to move their savings out of cash. Of the three groups, the Planners are the most confident about their financial future (72%). Six in 10 say they are knowledgeable about investing (58%) – the highest proportion of the three groups - and they are willing to take on higher risks for higher returns.

Jeremy adds, “We have identified a group of savers in Britain who are getting it right when it comes to battling inflation. The Planners are the most confident about their future and understand that over the long-term investing is likely to provide a better return than cash. We have to get the rest of the nation thinking this way; otherwise those with savings will see their pot melt away.

“All is not lost, but we need to encourage Brits to make a plan when it comes to investing. Our survey shows most people are putting aside money but they are not making it work hard enough for them. The Pausers need to decide when the right time to invest some of their cash is, while the Pinched need to be aware that even making small steps now will have a positive impact on their financial futures.”


Notes to editors:

Investor Pulse Survey - BlackRock’s Global Investor Pulse Survey examines investing and attitudes and behaviours across the world. The 2017 survey included 28,000 respondents in 18 countries. The UK sample included 4,000 respondents between the ages of 25-74. Survey conducted in Q1 2017.
*Source: Total median cash holding: survey population of 27.5m x £2,270. June 2017
**Source: Average UK CPI inflation level for 2017 (2.43%) / 2.43% as a percentage of total median cash holding
***Source: 2.43% as a percentage of individual median cash level
****Source: ; annual inflation rate of 2.43%, June 2017
*****Source: BlackRock: FTSE All Share 31/12/1996 – 30/12/2016


Media contacts


Ali Boyle

Tel: +44 20 7743 3363


This communication is for information purposes only and does not constitute a financial promotion, marketing communication or an offer or invitation to anyone to invest in any BlackRock funds and has not been prepared in connection with any such offer. Accordingly, this material does not constitute an offer or solicitation by anyone in any jurisdiction in which such offer or solicitation is not lawful or in which the person making such offer or solicitation is not qualified to do so or to anyone to whom it is unlawful to make such offer or solicitation. It is your responsibility to be aware of the applicable laws and regulations of your country of residence. This information is confidential and was prepared solely for the named recipient.  It may not be used or published without the prior consent of BlackRock.

Issued by BlackRock Investment Management (UK) Limited, authorised and regulated by the Financial Conduct Authority.  Registered office: 12 Throgmorton Avenue, London, EC2N 2DL.  Tel: 020 7743 3000.  Registered in England No. 2020394.  For your protection telephone calls are usually recorded.  BlackRock is a trading name of BlackRock Investment Management (UK) Limited.

Issued in the Netherlands by the Amsterdam branch office of BlackRock Investment Management (UK) Limited: Amstelplein 1, 1096 HA Amsterdam, Tel: 020 - 549 5200. 

In Australia, issued by BlackRock Investment Management (Australia) Limited ABN 13 006 165 975 AFSL 230 523 (BIMAL). This material is not a securities recommendation or an offer or solicitation with respect to the purchase or sale of any securities in any jurisdiction. It provides general information only and does not take into account your individual objectives, financial situation, needs or circumstances. Before making any investment decision, you should therefore assess whether the material is appropriate for you and obtain financial advice tailored to you having regard to your individual objectives, financial situation, needs and circumstances. This material is not a securities recommendation or an offer or solicitation with respect to the purchase or sale of any securities in any jurisdiction. This material has not been prepared specifically for Australian investors.  It may contain references to dollar amounts which are not Australian and may contain financial information which is not prepared in accordance with Australian law or practices.  This material is not intended for distribution to, or use by any person or entity in any jurisdiction or country where such distribution or use would be contrary to local law or regulation. BIMAL is a part of the global BlackRock Group which comprises of financial product issuers and investment managers around the world. BIMAL is the issuer of financial products and acts as an investment manager in Australia.

In Hong Kong, this press release is issued by BlackRock Asset Management North Asia Limited. This press release and the BlackRock website mentioned herein have not been reviewed by the Securities and Futures Commission of Hong Kong.

In Singapore, this information is issued by BlackRock (Singapore) Limited (company registration number: 200010143N)

In Korea, this information is issued by BlackRock Investment (Korea) Limited. This material is for distribution to the Qualified Professional Investors (as defined in the Financial Investment Services and Capital Market Act and its sub-regulations) and for information or educational purposes only, and does not constitute investment advice or an offer or solicitation to purchase or sells in any securities or any investment strategies.

In Latin America and Iberia: this material is for educational purposes only and does not constitute investment advice nor an offer or solicitation to sell or a solicitation of an offer to buy any shares of any Fund (nor shall any such shares be offered or sold to any person) in any jurisdiction in which an offer, solicitation, purchase or sale would be unlawful under the securities law of that jurisdiction. If any funds are mentioned or inferred to in this material, it is possible that some or all of the funds have not been registered with the securities regulator of Argentina, Brazil, Chile, Colombia, Mexico, Panama, Peru, Portugal, Spain, Uruguay or any other securities regulator in any Latin American country and thus might not be publicly offered within any such country. The securities regulators of such countries have not confirmed the accuracy of any information contained herein.

BlackRock México, S.A. de C.V., Asesor en Inversiones Independiente (“BlackRock México”) is a Mexican subsidiary of BlackRock, Inc., registered with the National Banking and Securities Commission (Comisión Nacional Bancaria y de Valores, “CNBV”) as an independent investment advisor (asesor en inversiones independiente) under the registration number 30088-001-(14085)-20/04/2017, thus authorized to render Investment Advisory Services. The registration of BlackRock Mexico in the Investment Advisors Registry (Registro de Asesores en Inversiones) does not imply certification on the compliance by the investment advisors with the applicable laws and regulations or the accuracy or correctness of the information contained herein. Please note that the CNBV exclusively oversees the provision of securities portfolio management services when making investment decisions in the name and on behalf of third parties, as well as services consisting in providing individualized investment advice on Securities, and the analysis and issuance of individualized investment recommendations, thus it is not entitled to supervise or regulate any other services provided by investment advisers.

Investment involves risks. Past performance is not a guide to future performance and should not be the sole factor of consideration when selecting a product. All financial investments involve an element of risk. Therefore, the value of your investment and the income from it will vary and your initial investment amount cannot be guaranteed. Capital at risk. The value of investments and the income from them can fall as well as rise and is not guaranteed.  You may not get back the amount originally invested.  Changes in the rates of exchange between currencies may cause the value of investments to diminish or increase.  Fluctuation may be particularly marked in the case of a higher volatility fund and the value of an investment may fall suddenly and substantially.  Levels and basis of taxation may change from time to time.

The views expressed do not constitute investment or any other advice and are subject to change.  They do not necessarily reflect the views of any company in the BlackRock or any part thereof and no assurances are made as to their accuracy.

© 2018 BlackRock, Inc. All Rights reserved. All other trademarks are those of their respective owners. BLACKROCK, BLACKROCK SOLUTIONS, iSHARES, BUILD ON BLACKROCK, SO WHAT DO I DO WITH MY MONEY and the stylized i logo are registered and unregistered trademarks of BlackRock, Inc. or its subsidiaries in the United States and elsewhere. All other trademarks are those of their respective owners.

About BlackRock

BlackRock helps investors build better financial futures. As a fiduciary to investors and a leading provider of financial technology, our clients turn to us for the solutions they need when planning for their most important goals. As of December 31, 2018, the firm managed approximately $5.98 trillion in assets on behalf of investors worldwide. For additional information on BlackRock, please visit