New inflation figures have highlighted how slim the pickings currently are when it comes to finding a savings account.
New inflation figures show that the Consumer Price Index (CPI) dropped to 4.2 per cent in December, from 4.8 per cent. This means that in order to beat inflation, consumers on the basic rate of tax need to find savings accounts with a rate of at least 5.25 per cent. Meanwhile, higher-rate taxpayers would need a rate of at least 7 per cent.
Analysis from Moneyfacts has found that there are only eight inflation-beating regular savings accounts available to consumers at the moment, and they are all fixed rate ISAs.
Moneyfacts calculates that, due to inflation, £10,000 invested five years ago would today only be worth £9,213, once average interest and basic rate tax is factored in.
Sylvia Waycot, spokesperson for the website, said, “The wheels of UK finance would shudder to a stop without the nation’s savers and yet they still see little reward for their investment."
She added, “The few accounts with headline rates are often brief introductory offers making savers need as many heads as Medusa, just to keep abreast of fluctuating savings rates."
