A large proportion of cash is being kept in people's homes rather than in current accounts, new figures from the Financial Services Compensation Scheme (FSCS) show.

It estimates that £7 billion is stored in the country's homes, with four per cent of those questioned admitting to having more than £1,000 somewhere inside their property.

Just one per cent, however, said they own £10,000 in cash that is not kept in a current account.

Mark Neale, chief executive of the FSCS, emphasised that money should always be kept with a bank, building society or credit union for both security and peace of mind.

"It is vital that savers know their money is protected up to the new limit of £85,000," he asserted.

Jasmine Birtles, founder of Moneymagpie.com, recently suggested that the start of the new year should be the perfect time for carrying out a financial assessment.