Under-pressure households raided their accounts in May, withdrawing a record £4.6 billion from banks and building societies.

The net withdrawal figure was the highest figure since monthly records started in October 1997, according to the Bank of England’s Money and Credit report.

This was a sharp contraction compared with net deposits of £3.7 billion flowing into bank and building society accounts in April.

When savings held in NS&I accounts were also included in the total, there was a net withdrawal of £3.8 billion made from accounts in May.

The report said this was a significant fall compared with a £5.3 billion increase in April.

Alice Haine, personal finance analyst at investment platform Bestinvest said: “High street lenders have come under fire in recent days for failing to pass on interest rate rises to their customers with some accounts still offering rates as low as less than 1%.

“Despite better savings rates on the table, households raided their savings pots, withdrawing £4.6 billion from banks and building societies on net, compared to net deposits of £3.7 billion in April – the highest level of household withdrawals on record.

“While many may be dipping into savings to meet rising living costs, savers should still shop around for the best deal available to them to ensure their money is working as hard as possible.”

The annual growth rate for consumer credit, which includes borrowing using credit cards, personal loans and overdrafts, eased slightly in May, reaching 7.5%, compared with 7.6% in April.

Meanwhile, the number of mortgage approvals made to home buyers increased from 49,000 in April to 50,500 in May. Approvals for remortgaging saw a rise from 32,500 to 33,600 during the same period.

Lucian Cook, head of residential research at Savills said: “The marginal improvement in mortgage approvals for house purchase in May occurred in the run up to the recent repricing of debt.

“Even so it reflects a market which has become increasingly weighted to, and reliant upon, cash and equity rich buyers.

“The June number will be more telling given the timeline of turbulence in the mortgage markets.  

“We’d expect to see greater focus on re-mortgaging at that point.”

Jason Tebb, chief executive of property search website OnTheMarket.com said: “With approvals for house purchases, an indicator of future borrowing, edging up slightly in May, these figures indicate continued caution among buyers in light of consecutive interest rate rises and the high cost of living.

“Stubborn inflation figures point to further rate rises, making affordability even more of an issue for those buyers relying on mortgages.

“With offers regularly being made below asking price, it is crucial that sellers price correctly in the first instance as being sensitive on price will speed up the time it takes to find a buyer.”

Ranald Mitchell director of Norwich-based mortgage broker Charwin Private Clients said: “Mortgage approvals for house purchases may have increased slightly in May but we have definitely seen signs of a slowdown in June.

“There may be seasonality in this but the more likely cause is consumer confidence being hit for six by all the base rate increases.”