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77 savings accounts now beat inflation

77 savings accounts now beat inflation

Category: Savings

Updated: 14/01/2014
First Published: 14/01/2014

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 It is now over 6 months old so the content may be out of date.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, released this morning, show that the Consumer Prices Index (CPI) fell to 2.0% in December. This is another drop from November's figure of 2.1% and is the lowest level of inflation seen since 2009, and in a welcome boost for savers there are now 77 savings accounts that can beat it.

In order to counter the effects of tax and inflation, a basic rate taxpayer will need to find a non-ISA account that pays at least 2.50% per annum – and there are currently 77 of them available across the ISA and non-ISA market.

This is a significant increase on the 48 inflation-beating accounts that could be found a month ago and even more so since September, when just nine accounts could do the same, with the continued drop in inflation painting a much more positive picture for the nation's savers.

However, savings rates are still at record low levels across the board, so although the number of inflation-beating accounts has improved it still might not lead to any measurable returns.

As Sylvia Waycot, editor of Moneyfacts.co.uk, points out:

"the average no notice savings account pays just 0.64% interest while the average ISA pays 1.64%, so unless savers are willing to lock their money away in a fixed rate bond there isn't much opportunity to achieve the 2.50% needed".

There might be better news, however, when ISA season hits. The withdrawal of the Funding for Lending Scheme could signal a return to a more competitive savings market, although it could take a while for the effects to be seen. "The ISA season will be a good indicator of how things may develop for the rest of the year," Ms Waycot said.

What Next?

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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 Any products featured may be withdrawn by their provider or changed at any time.

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