Of the £1.003 trillion, £262.6bn is held in ISAs and £740.6bn is in non-ISA accounts.

CACI members include the savings deposits of 34 leading providers of adult cash savings accounts. The amount saved in these accounts has risen by £17bn since January and £25bn since September 2021.

Separate data from the Bank of England showed £11.3bn was deposited into fixed-rate savings accounts in October, the highest amount since records began in 1997.

Savers missing out on interest

Yet the majority of the money is earning very low rates of interest.

Savers have £428bn in non-ISA, instant-access savings accounts, and 82% of those pay less than 0.5% in interest. There is £142 billion held in accounts offering 0.25% or less.

Of these accounts, 36% held less than £100, 55% had less than £1,000 and 21% had more than £10,000 in them.

Derek Spawling, Paragon’s savings director, said: “Savers are facing an uncertain time. Tax rises, high-inflation, and predictions of a sustained economic recession have seen them cutting back their spending to concentrate on saving.

“While the new analysis shows that people are making these hard decisions to help build up their savings pots, it also uncovered how substantial sums continue to be held in accounts offering low returns.”

Interest rate rises

The data from CACI, analysed by Paragon Bank, was conducted before the latest Bank of England interest rate rise to 3%.

Since then, several providers have increased the rate of interest they pay on savings accounts. The majority of market-leading savings accounts come from challenger banks, such as Atom Bank. The big banks have also been accused of failing to pass on rates to customers.

But some of the big high street banks have now increased rates including HSBC which upped the rate of its regular saver from 1% to 5% yesterday.

Rachel Springall, finance expert for Moneyfacts, said: “Savers will find providers have reviewed their table-topping cash interest rates in recent weeks, with notable attention made to fixed rate bonds and ISAs. Savers may need to act with pace if they wish to take advantage of the current rates on offer.

“Challenger banks and building societies are offering some of the best rates in this arena, so it’s wise to consider these brands over the more familiar household names. In addition, savers will need to also digest the terms any account may impose, such as withdrawal restrictions.”

“As good as it gets” for interest rates

However, despite recent rate rises, predictions of an upcoming recession could see a slowdown to the pace of rises.

Sarah Coles, senior personal finance analyst for Hargreaves Lansdown, said: “There was a fixed rate savings frenzy in October, as £11.3 billion piled into these accounts – a record high.

“It owes a great deal to higher rates, with the average for fixed rates rising from 2.49% to 3.26% in October – the biggest jump since December last year. However, there’s also a growing sense that this may be almost as good as it gets for fixed rates.

“Predictions of a recession may well mean interest rates don’t rise as much in the coming months, and are likely to fall as we go through a difficult year or so. This is factored into fixed rates, so there’s a growing chance that rates won’t go much higher from here.”