- Bad Credit
- Buy to Let
- Life Insurance
- Home Ins
- Utility Switch
- Credit Check
- About Us
- Terms and Conditions
- Contact Us
- Site Map
- Mortgage Site Map
- Life Insurance Site Map
- News 2013
- News Achieve 2012
- News Achieve 011
- News Achieve 2010
- News Achieve 2009
- News Achieve 2008
- News Achieve 2007
- Insurance News Achieve
- Articles Archive
- ©Copyright 2019
Savers’ nightmare continues
Inflation figures released today show the Consumer Prices Index (CPI) remained at 4.50% during May.
To beat inflation, a basic rate taxpayer at 20% needs to find a savings account paying 5.63% per annum, while a higher rate taxpayer at 40% needs to find an account paying at least 7.50%.
Basic rate taxpayers have just one account, a fixed rate ISA, which negates the effects of inflation. 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 inflation at 5.2%.
The effect of inflation on savings means that £10,000 invested five years ago, allowing for average interest, inflation and tax at 20% would have the spending power of just £9,441 today.
Sylvia Waycot, spokesperson for Moneyfacts.co.uk, said:
“Rising inflation means hundreds of thousands of savers need accounts paying a staggering 5.63% before they earn a real rate of return on their savings."
“This is going to be pretty difficult bearing in mind the average interest offered on an easy access savings account is 0.89%.
“As the Government’s 2% CPI target slips further beyond the Bank of England’s grasp, it is the nation’s savers who are left suffering the consequences of eroding spending power with little hope of rescue.
“Over the last six months the number of savings accounts that beat inflation for basic rate taxpayers has dropped successively from 22 at the start of this year, to just one today. This deal is a five year fixed rate ISA.
“Cash ISAs limit the amount of investment and therefore return, which is yet a further hindrance when trying to make ends met.”
Moneyfacts is the UK’s leading independent provider of personal financial information and our data is used and trusted throughout the financial industry.
Think carefully before securing other debts against your home, your home may be repossessed if you do not keep up repayments on your mortgage.
Go Direct.co.uk is a trading style for website purposes of Go Direct UK Ltd.
Go Financial Services is a trading style of Go Direct UK Ltd which is an appointed representative of Personal Touch Financial Services Ltd which is authorised and regulated by the Financial Conduct Authority. Registered in England & Wales Company 5703224. FCA Number 456600
We normally do not charge a fee for mortgage advice, however this is dependent on your circumstances. Our typical fee would be £500