21 Nov 2024

Savers never worse off than now

Inflation figures released today show the Consumer Prices Index (CPI) increased during February from 4.00% to 4.4%.

To beat inflation, a basic rate taxpayer at 20% needs to find a savings account paying 5.5% pa, while a higher rate taxpayer at 40% needs to find an account paying at least 7.3%.

Basic rate taxpayers can choose from just eight accounts that negate the effects of inflation, all of which are fixed rate ISAs. There are no inflation-beating accounts available to higher rate taxpayers and, worrying for everyone, there are no accounts available for any taxpayer that beat RPI at 5.5%.

Sylvia Waycot, spokesperson for Moneyfacts.co.uk, said:

“The continual rise in inflation compounds the misery of pensioners relying on savings to supplement their income.

“People trying to save a deposit for a first home will see inflation eating into their hard earned savings faster than it grows unless they seek out the few accounts that can keep pace with inflation.

“Over the last six months the number of savings accounts that beat inflation for basic rate taxpayers has dropped successively from 118 to only eight today, all of which are fixed rate ISAs.

“Cash ISAs limit the amount of investment and therefore return, which is yet a further hindrance when trying to make ends met.”

Moneyfacts Group
Moneyfacts is the UK’s leading independent provider of personal financial information and our data is used and trusted throughout the financial industry.

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