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UK savers withdrew £2.3 billion in January

It has been revealed that UK savers withdrew a massive £2.3 billion from their deposit accounts in the month of January. This beats the previous record by a significant £800 million and perfectly reflects the fact that many savers are now looking for alternative investments as interest rates near 0%. However, there is still a massive £568.2 billion on deposit in the UK which is there for the UK banking system to use as and when required.

While the shift towards withdrawals from deposit accounts comes as no surprise, a significant jump in the number of withdrawals shows the severity of the current situation for UK savers. As yet it is unclear whether these funds are being withdrawn to cover daily expenses or savers are looking for alternative investment markets to secure their money and increase their income.

There have been a number of longer term savings arrangements announced over the last few weeks and there is a feeling that many of these are attracting significant funds as savers fight for the best return for their deposits. In the short term it is highly likely this outflow of funds will increase as UK base rates are forecast to fall next month and possibly approach 0% in due course.

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