CHESTER, England, September 18, 2012 /PRNewswire/ --
- No easy-access savings accounts now beat inflation
- Basic-rate taxpayers need a rate of 3.14 per cent to gain benefit in real terms, increasing to 4.18 per cent for higher-rate taxpayers
- With falling savings rates, savers need to be quick to protect against inflation
Today's announcement by the Bank of England that The Consumer Price Index (CPI) has fallen from 2.6 per cent to 2.5 per cent will hopefully be good news for savers, and consumers should check their rates to ensure they are maximising their returns, according to MoneySupermarket.com. However, benefits maybe short lived, with CPI being predicted to start rising again soon as food, petrol and energy prices look set to start creeping up.
To beat inflation, basic-rate taxpayers will need an account paying at least 3.14 per cent to gain benefit in real terms from their savings, increasing to 4.18 per cent for higher-rate taxpayers, and 5.01 per cent for 50 per cent taxpayers.
For basic-rate taxpayers there are now no easy-access accounts, no cash ISAs, 109 fixed rate bonds and 43 fixed rate ISAs that beat the eroding effect of inflation. For higher-rate taxpayers still no easy-access accounts beat inflation and only six fixed-rate bonds beat inflation.
Kevin Mountford, head of banking at MoneySupermarket.com, said: "Today's news that inflation has fallen to 2.5 per cent after last month's rise out of the blue is good news for savers. However, it is as ever vitally important savers check their rates and are prepared to switch if they are not currently on the most competitive deal. The difference between the average and top-paying rates can be significant, so moving to a better deal can go a long way to help savers limit the impact on their pots.
"Only a handful of savings accounts currently beat inflation, and in most cases you have to tie up your funds in a fixed-rate product to gain benefit. Consumers need to make sure they are on the best deals possible to maximise any returns, especially as rates on savings accounts have been dropping drastically over the past few weeks. However, the top-paying savings accounts still offer rates almost six times that of base rate so by choosing these, you can reduce the impact inflation has on your pot."
Notes to Editors
MoneySupermarket.com compares (at 30th August 2012)
- 107 car insurance providers and 82 home insurance providers
- 12 broadband providers and 18 energy providers
- 32 unsecured loan and 6 secured loan providers
- 62 mortgage lenders and 28 credit card providers
- 66 savings providers and 37 current account providers
- Over 1,200,000 mobile phone deals
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