Millions of savers could be losing money without realising it, simply by leaving cash sitting in the bank.

New analysis shows households lost almost £7billion to inflation while they slept last year, as rock-bottom savings rates failed to keep up with rising prices.

With inflation climbing more than expected to 3.4% at the end of 2025, the real value of Britain’s cash savings was steadily eroded, underlining the hidden cost of holding too much money in low-paying accounts.

Research by Fidelity International reveals UK households hold around £1.88 trillion in cash deposits, yet most savers earned returns well below inflation over the year.

Official figures show inflation ended 2025 at 3.4%, according to the Office for National Statistics, while the average easy-access savings rate was just 1.94%, based on Bank of England data.

Fixed-rate accounts did better, paying an average of 3.56%, but easy-access products remain the most popular choice for savers.

Fidelity estimates that assuming 70% of household savings are held in easy-access accounts and 30 per cent in fixed-rate deals, savers earned around £45.6bn in interest in 2025 – an average return of 2.43%.

But once inflation is taken into account, the real value of cash savings fell by around £17.6bn over the year.

And because UK adults spend roughly 38% of their time asleep, that works out at almost £7bn of lost purchasing power while people slept – equivalent to around £122 per saver.

Marianna Hunt, Personal Finance Specialist at Fidelity International, said: “Inflation is a silent threat to savers with many people seeing the real value of their cash go backwards.

“With inflation rising again at the end of the year and remaining above target, our analysis underlines how even relatively modest inflation can continue to erode savings when returns on cash fail to keep pace.”

The research also highlights the longer-term danger of relying too heavily on cash. Looking at every rolling 10-year period between 1988 and 2025, Fidelity found that investing in UK stocks beat inflation 95 per cent of the time, compared with just 58% for cash savings.

Ms Hunt added: “Holding some cash is essential. For most people, having three to six months’ worth of essential spending in cash provides an important safety net, and many retirees sensibly hold larger cash buffers to manage short-term needs and market volatility.

“The risk comes from holding too much cash for too long. As our analysis shows, when savings rates fail to keep pace with inflation, large cash balances can quietly lose value over time – potentially undermining long-term financial security.”

The figures also show what savers might have earned instead. Global stock markets had a strong year in 2025, with the MSCI World Index returning around 13% in sterling terms.

If just a quarter of UK household cash savings – around £470bn – had been invested, Fidelity estimates the real value of savers’ money could have grown by around £44bn, even after inflation. That includes almost £17bn of growth while people slept.

Ms Hunt said: “When money is invested, it has the potential to keep growing even while you sleep – working in the background while you rest, rather than quietly losing value to inflation.”