Salford-based investment platform AJ Bell said that British people have saved £88 billion since March — with households increasing cash deposits at banks by £6.8 billion in September alone.

Citing Bank of England data, AJ Bell said: “Since March savers have stuck away £88 billion in cash  …

“The rate on sight (instant access) cash fell to 0.13%, the lowest since the bank started compiling this data in 2016.

“Similarly time deposits (longer term savings accounts) hit a new low rate of 0.56%.

“Mortgage approvals are at the highest level since September 2007.”

AJ Bell financial analyst Laith Khalaf said: “Savers are hoarding cash even though rates are at record low levels.

“Money that might in normal times have been spent in pubs and restaurants is being ploughed into the bank for a rainy day.

“However we’re getting to the point when a bank account is about as useful as a mattress when it comes to paying interest.

“Even though inflation is also low, much of the money squirrelled away into cash savings is slowly losing its buying power.

“Remarkably rates could be set to get even lower, with a Bank of England interest rate decision due next Thursday.

“Negative interest rates have been mooted, and while it’s probably too soon for the Bank to take this step just now, they have been warming markets up to the idea …

“Meanwhile mortgage approvals hit a new high as the property market continued to boom in September.

“This is likely to be close to a high watermark as local lockdowns curtail activity and the buyers start to wonder whether they can complete a house purchase before the end of the stamp duty holiday in March.

“We shouldn’t lose sight of the fact that these are aggregate figures.

“While increased savings and debt repayments paints a picture of healthy consumer finances, it misses out the important detail that the pandemic has widened the gap between the have and have nots. 

“Consumer finances look so healthy because of the additional money saved by the fortunate part of the population who’ve kept their jobs and reduced their outgoings.

“But we know plenty of people are feeling huge financial strain.

“Last week the FCA revealed that 12 million people in the UK are facing financial difficulties, and as government help is trimmed back and lockdowns take their toll on businesses, that situation is unfortunately only going to get worse.”