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Savers given raw deal

Savers given raw deal

Category: Savings

Updated: 22/04/2009
First Published: 22/04/2009

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 It is now over 6 months old so the content may be out of date.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 news that the UK is experiencing deflation for the first time in almost half a century is the latest blow for the country's savers.

Against the back drop of the lowest base rate in history, savings rates are in freefall, with the average no notice rate currently returning just 0.64 per cent.

Latest inflation figures have revealed that the actual return after basic tax and inflation on an average no notice savings account stands at 1.06 per cent for the Retail Price Index, but is a worrying -2.24 per cent for the Consumer Price Index.

Moneyfacts.co.uk's senior analyst, Darren Cook, said while low interest rates are geared to encourage savers to put their savings back into the economy, it serves little or no benefit to those who rely on interest from their hard earned wealth to subsidise their pension.

"Most pensioners who are likely not to have to make a mortgage repayment are enjoying no benefits in witnessing the RPI falling below zero for the first time since 1960," he continued.

"Savers who have made prudent or astute decisions in the past are currently seeing the real value of their savings depreciate on average by 2.24 per cent per annum.

"We hope that the Chancellor does not ignore these individuals when delivering his long awaited and crucial Budget speech."

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 Any products featured may be withdrawn by their provider or changed at any time.

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