Savers who want to make sure their money keeps pace with inflation might be having a slightly better time of it than they have over the past few years, but they still need to make sure they have a suitable account.
Since the Bank of England slashed base rate to 0.5% in 2009, it has been nearly impossible at times to find a savings account that delivers a real return, once interest, tax and inflation are taken into account.
News today that the consumer prices index (CPI) measure of inflation rose from 1.2% to 1.3% during October highlights the fact that savers need to stay vigilant when it comes to finding the best home for their money.
Analysts at Moneyfacts.co.uk have calculated that a basic-rate taxpayer needs an account paying interest of 1.63% a year simply to keep pace with inflation, while a higher rate-taxpayer needs to find an account paying at least 2.17%.
Moneyfacts said that of the 619 non-Isa accounts available at the moment, only 137 pay 1.63% or more.
“Inflation may have risen after three consecutive months of falls, but it still makes little difference to savers suffering from poor returns,” said Sylvia Waycot, of Moneyfacts.
“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.”