Inflation Rises To 0.5% | will never contact you by phone to sell you any financial product. Any calls like this are not from Moneyfacts. Emails sent by will always be from Be Scamsmart.

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Derin Clark

Derin Clark

Online Reporter
Published: 21/10/2020

The Consumer Prices Index (CPI) increased to 0.5% during September, up from 0.2% the previous month. This means that inflation has risen, which is largely thought to be due to the ending of the Government’s Eat Out to Help Out scheme that in turn saw restaurant and café prices increase.
Although inflation still remains significantly lower than the Government’s target of 2%, for savers facing a challenging market at the moment, this increase means the number of inflation-beating accounts has fallen by 217, down from 661 that could beat 0.2% last month to just 444 that can beat today’s rate of 0.5%.

Of the inflation-beating savings rates currently available on the market, 241 are fixed rate bonds, 106 fixed rate ISAs, 44 notice accounts, 29 easy access accounts, and just 24 variable rate ISAs.

Commenting on today’s inflation figures, Rachel Springall, finance expert at, said: “Inflation may remain below the Government’s target, but it can still have eroding power on savers’ cash if they do not have it invested in an account that is paying them a decent return of interest. As an example, stashing cash with a high street bank’s easy access account would net savers just £1 a year in interest on a £10,000 investment, based on a rate of 0.01% with NatWest’s Instant Saver. In comparison, they could earn £96 within the first year with Coventry Building Society at 0.96%.

“There may well continue to be consumers who have amassed some disposable income over the past six months or so and are debating where to put their cash. A mix of easy access, short-term fixed and an ISA are all good choices to spread the investment, but it does entirely depend on how soon savers need access to their money. As it stands, savers may be concerned about the months ahead, so it is vital they are comfortable with locking their money away, and if they are not, easy access may be the most appropriate choice. As always, it is imperative they pick a lucrative offer and not leave their cash in an account that is being eroded by inflation.”

Competition within savings market rising

There has been some good news for savers over the last few weeks, as new providers DF Capital and JN Bank were listed on the savings charts for the first time. Both providers entered the charts with competitive rates. In addition to this, as we reported earlier in the week, since August average savings rates have been rising, although the market remains highly volatile. “Over the past month, the top rates available on shorter-term fixed bonds and ISAs have improved, with providers such as with Al Rayan Bank increasing rates – a positive change for savers looking for a competitive return over the next year or so,” added Springall. “However, there is still much more room for improvement across the market and there is no guarantee such lucrative offers will stick around for long.

“Within the easy access market there has continued to be some volatility, as the top deals offered a month ago did not last on the shelf for long, reiterating why savers need to act quickly to take advantage. Indeed, a month ago savers could find a top rate of 1.20% with Skipton Building Society, but today the top easy access rate comes from Coventry Building Society at 0.96%. This excludes the National Savings & Investments top rates as they are due to be cut next month.”


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