The savings accounts you need to beat inflation

Category: Savings
Date: 7/14/2010

Savers have been given a much needed boost after official figures revealed UK inflation fell for the second month in a row in June.

The Office for National Statistics said Consumer Price Index inflation slowed to 3.2% last month, down from 3.4% in May, thanks mainly to a drop in the price of clothes and fuel.

According to Moneyfacts.co.uk, the downwards move means a basic rate tax payer now needs to find a savings account paying 4.00% in order to stop their savings pot effectively eroding away.

Higher rate tax payers still face the unenviable task of locating an account paying 5.33%, a nigh on impossibility.

The good news for basic rate tax payers is that 47 savings accounts are available which would have the desired effect.

Amongst the best savings accounts currently on offer above the rate required to break at least even is the five year fixed rate bond from ICICI Bank paying 4.75%.

State Bank of India also offer a five year fixed rate bond which pays 4.50%.

"Savers are finding it almost impossible to combat the effects of tax and inflation," said Darren Cook, spokesperson for Moneyfacts.co.uk.

"Hopefully the Bank of England will increase base rate sooner than later and better savings rates will quickly follow."

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