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48 savings accounts now beat inflation!

48 savings accounts now beat inflation!

Category: Savings

Updated: 19/12/2013
First Published: 19/12/2013

MONEYFACTS ARCHIVE
This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

The latest official inflation figures show that the Consumer Prices Index fell to 2.1% in November – the lowest it has been since the beginning of 2009.

This means basic rate taxpayers will need to find a non-ISA account paying at least 2.63% in order to beat the effects of tax and inflation, and currently there are 48 such accounts, including both ISA and non ISAs, that do just that, according to Moneyfacts data.

Remember, because of the tax-free nature of a cash ISA the rate needed to beat inflation will be anything over 2.1%.

At the time of the last inflation announcement a month ago, when inflation dropped from 2.7% to 2.2%, there were 45 savings accounts that negated the effects of tax and inflation.

In comparison, two months ago there were only nine accounts that beat inflation – meaning the situation has somewhat improved for savers.

But rates are still down across the board, with Moneyfacts.co.uk's Editor Sylvia Waycot pointing out that the average easy access savings account only pays a miserable 0.67%, meaning savers will need to commit their funds to a longer-term bond if they have any hope of achieving inflation-beating returns.

"If the experience of saving continues to be one of frustration it could result in the savings habit becoming a thing of the past, and what would that mean for home ownership, pensions and long-term care?" Ms Waycot added.

What next?

Find an inflation-beating savings account now

Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.

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