Inflation Beating Savings Accounts
Inflation may have risen after three consecutive months of falls, but it still makes little difference to savers suffering from poor returns.
There is an abundance of ISAs that beat inflation, over half all cash ISAs in fact. However, it is the lack of decent returns that’s the big problem for savers, not choice.
Today there are a total of 828 savings accounts on the market, but only 267 (135 fixed bonds, 130 ISAs and 2 notice accounts) pay enough interest to negate the effects of tax and inflation*.
This time last year there were only 45 accounts to choose from, but despite the lack of choice, these savings deals paid better interest, so savers are in a worse situation today.
With the New Year fast approaching, savers are daring to hope because the much anticipated Pensioner Bonds launch in January, offering up to 4% interest. However, those looking to supplement their income will be disappointed as these won’t pay monthly interest. The average fixed return on standard monthly interest accounts is currently an inflation beating 1.83%.
What savers really want for Christmas is someone to shake up the market, so that providers start offering decent returns on their savings.