Inflation 'hitting savings'
14.10.2008
Inflation is having a detrimental effect on the sums put aside in savings accounts, new research suggests.
A study conducted by Defaqto reveals a taxpayer paying basic rate needs returns of at least 6.5 per cent on the money in their savings account if they are to keep pace with inflation.
Those who pay higher rates will need gross returns of almost nine per cent, it continues.
David Black, Defaqto's principal consultant of banking, said: "To exacerbate this situation further many variable rate accounts will see rates being reduced over the next two or three weeks as a result of the base rate change."
However, he noted many predict a fall in the rate of inflation.
The Office for National Statistics reports the consumer price index annual inflation has reached a 16-year high of 5.2 per cent.
It is the highest since 1992, when it soared to 7.1 per cent.
A study conducted by Defaqto reveals a taxpayer paying basic rate needs returns of at least 6.5 per cent on the money in their savings account if they are to keep pace with inflation.
Those who pay higher rates will need gross returns of almost nine per cent, it continues.
David Black, Defaqto's principal consultant of banking, said: "To exacerbate this situation further many variable rate accounts will see rates being reduced over the next two or three weeks as a result of the base rate change."
However, he noted many predict a fall in the rate of inflation.
The Office for National Statistics reports the consumer price index annual inflation has reached a 16-year high of 5.2 per cent.
It is the highest since 1992, when it soared to 7.1 per cent.