Savers withdraw record amount of money in May - Commentary from the CEO of My Community Finance
In May, individuals tapped into their bank and savings accounts at an unprecedented rate, triggering concerns from charitable organisations regarding the persistent challenges of a costly lifestyle.
According to the Bank of England, there was a deficit of £4.6 billion between withdrawals and deposits into bank and building society accounts. This marked the highest level recorded in the past 26 years, since comparable records were established.
Escalating expenses like groceries, mortgage obligations, and rent payments are placing considerable pressure on household budgets, contributing to financial strain.
Founder and CEO of My Community Finance, Tobias Gruber, said: "It's disheartening to witness savers resorting to withdrawing their funds because of the burden of the cost of living crisis, leaving people vulnerable to potential job loss or unforeseen circumstances.
This emphasises the urgent need for the government to provide more supportive measures to alleviate financial strain and provide stability. Having a savings account provides a financial safety net and reduces the need to rely on credit cards or loans, helping to avoid debts and financial stress.
“But we mustn't assume withdrawals in May 2023 have been made due to financial hardship alone. Over the past year, Britain's biggest banks have been making billions of pounds by swiftly passing on interest rate hikes to their borrowers but unacceptably slow to pass them on to their savers. With little incentive, it's no surprise that savers are withdrawing money and moving their funds around to find a better deal and help their money go further”.
About Tobias Gruber
Tobias Gruber is the founder and CEO of My Community Finance. For the past 30 years, he's been a prominent leader in investment banking and asset management for some of the sector's most renowned banks, including Credit Suisse, SwissBank, JP Morgan and Morgan Stanley.
Fast forward to 2018, Tobias launched My Community Finance to provide a platform for the financially excluded, helping people to get back on their feet with ethical and socially responsible lending. Within 36 months, My Community Finance has become accountable for 25% of borrowing within the credit union sector.
Tobias has experienced first-hand how certain areas of the finance world are ripe for change and is a passionate advocate for using fintech to help people and solve society's economic problems.
About My Community Finance
My Community Finance is on a mission to transform how its customers manage their money by giving them access to ethical alternatives through two of the U.K.'s biggest credit unions: My Community Bank and Castle Community Bank.
Credit unions give a lifeline to customers who struggle to access mainstream credit by introducing them to financial communities that don't prioritise profits and whose unique regulatory structure means they can offer fairer rates.
Based in London and launched in 2018, My Community Finance is fully authorised and regulated by the Financial Conduct Authority and is a trading name of Amplifi Capital (U.K.) Limited, which has offered ethical and responsible financial products to near-prime consumers since 2015.
