Savers are sitting on a record £2.2trillion in cash despite the Chancellor's efforts to persuade more households to invest their wealth, new data shows.

Household savings climbed in July – the most recent data – to a record high, according to analysis of Bank of England statistics by financial services firm Bowmore Wealth group. 

This is despite an aggressive investment push from the Labour to bolster the flailing economy by encouraging savers to invest in UK companies.

Consumers are funneling more money into savings accounts despite squeezed budgets as confidence in the economy plummets.

And as Budget rumours of chunky tax rises swirl, households are shoring up their finances by sitting on their wealth to mitigate the announcements made next month.

Households are also hiding their money from sticky inflation as the cost of goods has been pushed up some 3.8 per cent.

Savings appetite is growing when compared with our income, Bowmore found after analysing Office for National Statistics data. 

The household savings rate – the percentage of disposable income consumers are putting aside – hit 11 per cent in the first quarter this year.

Charles Incledon, of Bowmore, says: 'It's clear that households are continuing to prioritise short term financial security.

'The returns on cash savings have improved, but over the long term, shares tend to outperform cash in both high and low inflation environments.'

Pouring money into equities outperforms cash savings over the long term, but many savers see investing as high risk with a possibility of losing their money. 

But for example, global equities, represented by the MSCI world index, have returned an average of 12.6 per cent a year over the last ten years. 

However, savings accounts and cash individual savings accounts (Isas) typically have a far lower rate of interest, even during periods of high inflation seen in the last few years.

Mr Incledon adds: 'If people are reluctant to invest because they're unsure where to start, then getting financial advice is a valuable first step. 

'Good advice can help savers balance risk, make the most of their allowances and build a strategy that protects and grows their wealth.'

It's likely many do not want to take an unnecessary risk with their heard-earned money and prefer to keep their cash in savings accounts. 

Plus, many savers need their money within the next five to ten years, whether that's for retirement or for home improvements. 

Experts typically say that investments are best held for a minimum of five years to ride out market ups and downs.