UK charities have reduced cash holdings and invested in stocks as they face fundraising challenges.
There has been a huge drop in the interest rates on cash deposit accounts for charities, according to independent investment manager James Hambro & Partners.
The average interest rate on a deposit of £10,000 from a charity cash deposit account was 0.28 per cent AER in August 2021 compared to 0.54 per cent AER in January 2018.
The average rate for a deposit of £1m had dropped to 0.31 per cent AER from 0.54 per cent in 2018.
Before the pandemic, charities could choose from 82 savings accounts offering 0.5 per cent AER or more on balances of £50,000 but by August 2021 this had dropped to 29.
Cancer charity Maggie’s financial director Allison Wood, said the pandemic had placed challenges on fundraising while the demand for services had “never been greater”, leading the charity to invest more in the stock market.