Author: Colin St John, Group Chairman
Could an overlooked opportunity help build a more financially resilient Britain?
One of the things I've learned over the years is that not every imperfect situation requires someone to blame. Sometimes the better question is whether there's a way to create a better outcome for everyone involved.
That thought came back to me during Talk Money Week.
I had spent the week reading and thinking about financial capability, financial resilience and the systems that help people make better decisions. Conversations around information overload, procrastination, financial security, workplace wellbeing and the growing need for financial education.
Then I came across a statistic suggesting that around 6.4 to 6.5 million UK current accounts hold balances of more than £10,000 while earning no interest at all. Analysis based on CACI data suggested that hundreds of billions of pounds sit in such accounts.
At first, I wasn't completely sure why it grabbed my attention.
It certainly wasn't because I thought customers were foolish, nor was it because I thought banks were somehow behaving unfairly. In fact, I probably understand both sides better than most, having been with the same bank for nearly fifty years.
Have they always offered the best savings rates? No.
Have they frustrated me at times? Of course.
But I've also valued the interactions with branch staff, and the telephone conversations with the support teams over the years. I've watched them invest heavily in technology.
Today I do virtually all my banking through their app, and I genuinely enjoy using it. I've also seen encouraging examples of banks investing in financial capability and education programmes.
So this isn't an article about bashing the banks.
It's about what happens when we look beyond the obvious.
Because those millions of account holders are free to keep their money wherever they choose. Some may value convenience. Others trust their bank. Some may simply be too busy dealing with life to worry about optimising a savings rate.
That's their choice, and that money remains theirs.
But while the money may be standing still, its presence within the banking system continues to create value, and that got me thinking.
Not about who owns the money, nor about who is right or wrong. But about whether we could achieve a better outcome from the situation.
The Question That Stayed With Me
The banking system works because deposits allow banks to operate, lend, invest and support the wider economy. That's not a criticism, it's how the system is designed to function.
Successful banks matter. Profitable banks matter. We need a healthy banking sector that supports businesses, households and the wider economy. But when billions of pounds sit in accounts earning little or no interest, value is still being created somewhere within that system.
The question I found myself asking wasn't:
"Should banks be making that money?"
It was:
"Could some of the value created by financial inertia be used in a way that benefits everyone?"
Because while those balances sit untouched, we're simultaneously having national conversations about financial capability, financial education, workplace financial wellbeing, financial exclusion, household resilience and support for vulnerable consumers.
Almost every government, every employer and every financial institution agrees these things matter.
The challenge is how we fund them.
Let's Call It What It Is
Let's be clear about where this value comes from.
Those balances are not sitting idle. While earning little or no interest for the customer, they continue to contribute value within the banking system. They support lending, liquidity and the normal commercial activities that allow banks to operate profitably.
That isn't a criticism of banking. It's banking doing exactly what it was designed to do.
But it does raise an interesting question.
When billions of pounds remain in accounts earning little or no return, largely because customers have chosen not to move them, how should we think about the value that continues to be created?
As a normal commercial outcome?
As the consequence of customer choice?
Or as a form of value created through financial inertia?
Reasonable people will arrive at different answers.
What interests me is not which answer is right, but whether there is an opportunity hidden within the question itself.
If we accept that at least some of this value exists because millions of people leave money where it is, then perhaps it is reasonable to ask whether a small proportion of that value could serve a wider purpose.
Not by removing personal responsibility.
Not by penalising successful banks.
And not by taking away customer choice.
But by exploring whether a better outcome exists for everyone involved.
A Different Kind of Conversation
When discussions like this arise, the answer often moves quickly towards taxation.
Perhaps banks should pay more.
Perhaps government should spend more.
Perhaps consumers should take more responsibility.
But I wonder whether we're missing the opportunity to think differently.
What if, instead of looking for a winner and a loser, we looked for a solution that created value for everyone?
Imagine an Independent Financial Resilience Fund.
Not controlled by banks.
Not controlled by politicians.
Not tied to election cycles.
A fund with a single purpose, helping build a more financially capable and financially resilient society in the UK.
A fund that could support:
Financial education in schools.
Workplace financial wellbeing programmes.
Financial capability initiatives.
Debt prevention services.
Guidance for vulnerable consumers.
Digital tools that simplify financial decision-making.
Not as charity, not as a voluntary gesture announced in a press release and quietly dropped a year later. And certainly not as another form of taxation. Instead, as a long-term partnership between financial institutions, policymakers, employers and educators, built around a shared belief that stronger financial resilience benefits everyone.
I am not suggesting banks hand over all of the value they create. Let’s remember,
Profitable banks matter.
Strong banks matter.
Innovation, investment and lending matter.
The question is simply whether a small, clearly defined proportion of value that arises from financial inertia could help strengthen the financial resilience of the society in which that value was created.
Not because anyone has done anything wrong.
But because doing something better may be possible.
Why This Matters
Throughout Talk Money Week, one theme kept resurfacing.
Most people aren't struggling because they lack intelligence, nor are they struggling because they don't care.
They're busy, life gets complicated and priorities compete.
Sometimes doing nothing isn't really a decision at all. It's simply what happens when everything else gets in the way.
That's human nature, and perhaps that's why this idea keeps returning to me.
I've spent most of my career trying to find better outcomes hidden inside imperfect situations.
Not by assigning blame.
Not by picking sides.
But by asking whether there's a way for everyone to leave better off than they arrived.
Which brings me back to those millions of accounts.
Perhaps we've been asking the wrong question.
Instead of asking who should benefit from financial inertia, perhaps we should be asking whether it's possible for everybody to benefit. Because if a society becomes more financially capable, more financially resilient and less dependent on crisis intervention, that's a victory for all of us.
And if we genuinely believe that a financially resilient society matters, then perhaps the most important question isn't where the money is.
It's whether the value being created by that money could work a little harder for the society that created it in the first place.