Inflation - What Can Savers do to Protect Their Savings?
CHESTER, England, October 16, 2012 /PRNewswire/ --
- Inflation falls to lowest levels in almost three years
- Four easy access savings accounts now beat inflation
- Basic rate taxpayers need a rate of 2.76 per cent to gain benefit in real terms, increasing to 3.68 per cent for higher rate taxpayers
Today's announcement by the Bank of England that The Consumer Price Index (CPI) has fallen to the lowest levels in almost three years, falling to 2.2 per cent from 2.5 per cent last month will be welcomed by savers. It provides the perfect opportunity for them to check existing rates and switch to a better deal in order to ensure they are maximising returns according to MoneySupermarket.com.
To beat inflation, basic rate tax payers will need an account paying at least 2.76 per cent to gain benefit in real terms from their savings, increasing to 3.68 per cent for higher rate tax payers, and 4.41 per cent for 50 per cent tax payers.
For basic rate tax payers there are now four easy access accounts, 16 cash ISAs, 144 fixed rate bonds, 61 fixed rate ISAs and 19 notice accounts that beat the eroding effect of inflation. For higher rate tax payers still no easy access accounts beat inflation. However, 12 fixed rate bonds and 3 fixed rate ISAs beat inflation.
Kevin Mountford, head of banking, at MoneySupermarket.com, said: "Today's news that inflation has fallen to a three year low should serve as a reminder to savers that they should be checking their rates and preparing to switch if they are not currently on the most competitive deal. There can be a significant difference between the average and top paying rates so moving to a better deal can go a long way to help savers limit the impact on their pots.
"In addition, falling inflation also helps ease the pressure on UK household finances, although the recent energy price rise announcements may mean this reduction may only be a temporary fall. This month's figures will also impact how much benefits such as Jobseeker's Allowance are increased by next April. Households should still look to review all of their household bills and finances and try to reduce their outgoings, as the cost of living it still high."
MoneySupermarket.com compares (at 30th August 2012)
- 107 car insurance providers and 82 home insurance providers
- 12 broadband providers and 18 energy providers
- 32 unsecured loan and 6 secured loan providers
- 62 mortgage lenders and 28 credit card providers
- 66 savings providers and 37 current account providers.
- Over 1,200,000 mobile phone deals
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