SCOTLAND'S savings institutions have seen billions of pounds flood into their coffers as a "flight to quality" gathers pace following weeks of stormy stock markets.
The HBOS Group, Lloyds TSB Scotland, Royal Bank of Scotland and Scottish Widows have seen strong inflows of cash as investors pulled money out of shares and turned to safer havens.
HBOS, Britain's biggest savings institution, said the group had s
een a significant increase in deposits across its five main brands over the last few weeks, after substantial receipts during the first six months of the year. The bank's savings chest leapt £7bn over the six months to the end of July.
An HBOS spokesman said: "We have seen another big jump from July to August, which is to be expected. In times of uncertainty, customers turn back to traditional institutions which they trust."
A Lloyds TSB Scotland spokeswoman also reported a substantial upsurge in savings. She said: "We are seeing big inflows generally, as conditions call for a prudent outlook. There are clear signs that customers are becoming more cautious about where they put their money."
Richard Clark, head of product development at Scottish Widows Bank, said there had been a change in the pattern of savings inflows over the past two months, with more money coming both from existing customers and new account holders.
He said: "There has been a definite change in the pattern of customer savings habits. It could be partly that they are simply saving more or that they have paid for their holidays, so there is a seasonality factor. But we still think the fluctuations in stock markets are making cash more attractive, and the well-known institutions are likely to benefit most."
Sainsbury's Bank has been one of the biggest beneficiaries of the "flight to quality", revealing that the amount of money deposited in its Internet Saver Account between August 6 and 19 was 42% higher than the same period last month.
The bank, also partly owned by HBOS, has recently increased the returns. However, it believes stock market uncertainty has been a major driver.
Peter Wood, Sainsbury's head of savings, said: "In June and July, the number of shares sold by private investors was more than double the number bought. Much of the money generated through the sale of these shares is likely to be sitting in cash as investors look for a good safe return."
RBS also confirmed an uplift in deposits, but a spokesman said that it was too early to say what was driving inflows.
The UK's biggest building society, Nationwide, indicated deposits were growing ahead of normal expectations at this time of the year.
However, at National Savings, the traditional shelter in times of turbulence, a spokeswoman said that although there had been a slight increase particularly in instant access deposits and Premium Bonds, the uplift was not significant. Most money had gone into Premium Bonds.
Standard Life Bank also indicated it had seen no increase in deposits.
