Bank Chaos Sparks Gold Rush As Bullion Savings App Sees 48% Spike In Account Openings
Three weeks on from the sudden collapse of Silicon Valley Bank, the frantic efforts of regulators and central banks to avert a banking crisis have prompted thousands of UK savers to move money out of the banking system entirely – by saving in gold rather than Pounds and pence.
Data released by the gold bullion savings app TallyMoney, which welcomed almost 20,000 new customers in 2022 alone, shows the number of accounts being opened has surged 48% since the start of March.
TallyMoney, which works like a digital bank but with customers’ savings stored as real gold, has also seen many existing customers transfer more of their savings into gold. The size of the average customer’s holding is now up 55% compared to February.
Gold rose nearly 6% in value in March and hit a record high last month of £1,643.43 per ounce. The precious metal rose 17% against the Pound in 2022 as investors flocked to gold as a way to protect themselves from double-digit inflation and beat the measly interest rates offered by conventional cash savings accounts.
With Consumer Price Inflation still standing at 10.4%, the Bank of England has increased its base rate 11 times since December 2021. However high street banks have proved reluctant to pass on the benefit of those increases to savers.
The average easy access savings account paid annual interest of 0.2% in December 2021, and this has now climbed to just 1.85%. The modest 1.65% increase is barely a third of the 4.15% cumulative jump made by the Bank of England base rate over the same period.
Cameron Parry, CEO of TallyMoney, said: “The past few weeks haven’t just delivered a surge in the number of people looking to save in gold; they’ve also shifted people’s reasons for doing so.
“Last year most customers joined TallyMoney as a way to protect their savings from inflation, as it soared into double-digits and eroded the value of the money in their conventional bank accounts.
“While that motivation is still there – at 10.4%, CPI remains five times higher than the puny interest paid by the average easy access cash account – we’re increasingly seeing people come to us because they’re losing confidence in the banking system itself.
“The echoes of the 2008 banking crisis, with the returning threat of contagion and taxpayer-funded bailouts, have reawakened public distrust of the big banks.
“With stock markets being dragged down sharply too, many consumers are looking for ways to take their savings out of the firing line, and demand for gold – for centuries regarded as the ultimate safe haven – has soared. People still need money and they still trust gold. At TallyMoney they get the best of both worlds.”
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