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Savings freefall looks to have ended

Savings freefall looks to have ended

Category: Savings

Updated: 19/05/2009
First Published: 19/05/2009

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 It is now over 6 months old so the content may be out of date.

Savers have had a hard ride in recent times due to dwindling levels of interest on their hard earned money. However the freefall in rates looks to have ended, for some of us at least.

The average savings rate on a no notice account available to consumers is currently hovering around the 0.65 per cent mark, just above the Bank of England's base rate.

The inflation figures published today show that the real return after basic tax and inflation on an average no notice savings account is 1.73 per cent for the Retail Price Index (RPI).

The real return for the Consumer Price Index (CPI) is minus 1.77 per cent.

Darren Cook, analyst at Moneyfacts.co.uk, said: "Unfortunately, low interest rates are geared to encourage savers to plough their savings back into the economy, but this serves little or no benefit to those who rely on interest from their hard earned wealth to subsidise their pension.

"Using both inflationary indices, the real return on savings interest is showing a pleasing trend for RPI, up 0.67 per cent on last month."

However, Mr Cook highlighted that RPI is only beneficial to those who have recently benefited from cheap monthly mortgage repayments and that mortgage free pensioners are seeing a rise in expenses combined with a drop in the worth of their savings.

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 Any products featured may be withdrawn by their provider or changed at any time.

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