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Nine savings accounts now beat inflation

Nine savings accounts now beat inflation

Category: Savings

Updated: 15/10/2013
First Published: 15/10/2013

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 It is now over 6 months old so the content may be out of date.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 figures from the Office for National Statistics show that inflation remained at 2.7% during September.

This means that in order to beat inflation, a basic rate taxpayer at 20% will need to find a non-ISA account paying at least 3.38% per annum, while a higher rate taxpayer will need an account paying 4.50%.

Moneyfacts.co.uk data reveals that there are now eight cash ISA savings accounts that beat inflation, and one fixed rate bond. For a list of the top 5 cash ISAs that now beat inflation click here.

"The fact that this month inflation stuck at 2.7% will not stop the undue distress savers are feeling due to the low returns on savings accounts. They have witnessed the average interest paid on no-notice accounts fall by 0.38% in the last 12 months," said Editor of Moneyfacts.co.uk, Sylvia Waycot.

"Savers have little hope of changing their fortune, as during September just 52 savings accounts raised their rates compared to 87 that reduced them."

ISA allowances for 2014/2015

The Government sets the annual increase in ISA allowances according to September's inflation figures.

Currently, the ISA allowance for 2012/2013 is £11,520. This means that £5,760 can be invested in a cash ISA, and £5,760 in a stocks & shares ISA, or savers can invest the full allowance of £11,520 in a stocks & shares ISA.

But the investment firm Hargreaves Landsdown estimates that the ISA allowance will rise to £11,760 in April next year. This means savers will be able to invest £5,880 into a cash ISA.

Meanwhile, the Junior ISA allowance should increase by £120 to £3,840.

What next?

5 cracking easy access savings accounts
Read our guide on stocks & shares ISAs

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 Any products featured may be withdrawn by their provider or changed at any time.

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