The bank’s Money and Credit report showed that £18.5bn was put into savings accounts in January, almost four times the average monthly deposit figure before the pandemic. Meanwhile, savings rates have remained at historical lows.

However, some of this cash may have been from £3.5bn of withdrawals from National Savings and Investment (NS&I) accounts in January, after NS&I cut rates across its range of savings accounts.

NS&I deposits are not counted as ‘household deposits’ in the Money and Credit report, but can be an alternative home for consumers’ savings.

As well as contributing to savings, people also paid down debts in January, with individuals making net repayments of £2.4bn. Most of this – £2.2bn – was repaid on credit cards, with the remaining £0.2bn repaid on other forms of consumer credit.

This compares to an average net repayment of £1bn between September and December 2020, and was the largest net repayment since May 2020. The decline also reflects less new borrowing.

The actual interest rates paid on interest-charging overdrafts bounced back by 31 basis points to 20.82% in January, close to series high in September 2020 (20.86%).

Rates on new personal loans to individuals rose slightly to 5.41% but remains low compared to an interest rate of 7.03% in January 2020. The cost of credit card borrowing rose by 27 basis points to 18.03% in January.

Sarah Coles, personal finance analyst at Hargreaves Lansdown, said: “This lockdown has provided a shot in the arm for saving, switching, and debt repayment. The average figures look promising, but are hiding an awful lot of pain.

“Spending every waking second at home, either coping with loneliness or putting up with demanding families, might have driven many of us to the brink of our emotional resilience, but for an awful lot of people, it has helped them spend less, save more, and build their financial resilience. Saving and debt repayments both shot up in January.

“The average figures look promising, but averages always hide an awful lot of suffering. There are those who have been managing on lower incomes for months, and are really struggling. The FCA figures showed that while 26% of people have been able to save more during the crisis, 34% have eaten into their savings. And while 19% have been able to pay off more debt, 14% have taken more on.”

Net mortgage borrowing remained robust at £5.2bn in January. There were 99,000 mortgage approvals for house purchase in January, in line with the average of 100,000 since October 2020. Effective interest rates on new mortgage borrowing fell to 1.85%.

Iain McKenzie, CEO of The Guild of Property Professionals, said: “Despite January traditionally being a slower month for purchasing a home, these figures show the stampede to buy property before the stamp duty holiday ends.

“It is good news for the wider economy that there is still interest in moving up the property ladder and consumer confidence in mortgages is still robust. Interest rates on mortgages are some of the lowest we’ve seen in a long time, and this could be another strong year for the housing market.”