Inflation falls to 2.4% - Savings - News - Moneyfacts


Inflation falls to 2.4%

Inflation falls to 2.4%

Category: Savings

Updated: 21/05/2013
First Published: 21/05/2013

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 It is now over 6 months old so the content may be out of date.

Figures issued this morning by the Office for National Statistics (ONS) have revealed the Consumer Prices Index (CPI) fell during April 2013 by 0.4% to 2.4%.

Remaining above the Government's inflation target of 2%, April marked the first month in which CPI has slowed, with falling transport costs, such as air fares and fuel costs, believed to be behind the drop.

The Retail Prices Index (RPI) measure, which includes housing costs, reduced from 3.3% in March 2013 to 2.9% in April.

Despite a fall in CPI, savings rates are still being hit hard by the effects of tax and inflation. Just six accounts, out of a total of 861, currently offer rates that beat the rate of inflation, five of which are cash ISAs.

A £10,000 investment made five years' ago, allowing for average interest and tax at 20%, would have the spending power of £8,860.60 today.

Sylvia Waycot, Editor at, said: "Inflation may be slowing down and the pound in the pocket should in theory buy more than it did last month. However, the pound in the savings account is still being savaged by stagnant returns and above-target inflation.

"It is absolutely shocking that only six ISAs beat or match the rate of inflation. Savers need to get angry. They have been ignored for too long.

"Taking into account the taxman's share and the cost of living, savers need an account paying a hefty 3% before they earn a real rate of return and yet the average no notice savings account only pays a paltry 0.72%.

"In contrast, a year ago, there were 127 ISAs and 32 standard accounts that beat tax and inflation despite BoE base rate being static at 0.5% and CPI standing at 3.00%.

"We are in the early part of a new tax year and savers should look to use up all of this year's ISA allowance, that way they at least don't have to share their returns with the taxman," she said.

What next?

Compare the best savings rates
Find all the best cash ISAs with Savings search

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 Any products featured may be withdrawn by their provider or changed at any time.

Related Articles

Average five-year fixed bond rate falls below 2%

Long-term fixed rate bonds used to be the top solution for savers looking to get a decent return on their savings, but unfortunately, times have changed, with our latest data revealing that the average five-year rate has fallen to a new record low.

Savings rates plummet to fresh lows yet again

It’s becoming a recurring theme, and unfortunately, it’s showing no signs of stopping. Savings rates have plummeted to fresh lows once again as the impact of the base rate cut continues – and this month, product availability has followed.

Less than half of savings accounts beat inflation

Official figures show that inflation jumped up during September, with CPI rising to 1%. Not only does this mean that consumers may begin to feel the impact on their wallets, but there are now far fewer savings accounts that will beat inflation.