Commenting on the inflation rate on savers, Rachel Springall, finance expert at Moneyfacts.co.uk, said: “Beating the eroding effects of inflation is possible in the short-term if savers chase down the best deals, but it is worth pointing out that there are still many easy access accounts paying less than 1.0%. As an example, should a saver have their cash with a high street bank, they could be earning just 0.01% in interest, so their spending power is falling in real terms.
“Savers coming off a fixed rate bond deal this month will be disappointed to see the top rates pay substantially less than those a year ago. Indeed, in 2019, the top one-year fixed rate bond paid 0.89% more as an expected profit rate and in 2018, the top two-year fixed rate bond paid 0.86% more than the top deal available today. Fixed ISA rates have also fallen, and savers will need to contemplate whether to choose these over a fixed rate bond taking into consideration the Personal Savings Allowance.
“While there are still savings accounts that can beat inflation today, the expected rate of inflation during July-September 2021 is predicted to climb to 1.8%, and not one standard savings account can beat this rate or indeed the Government’s target of 2%. Savers will therefore need to carefully consider the options available to them right now and whether access to their cash is a priority.
“If savers are putting aside more cash they have amassed during the lockdown, then some savings deals may get subscribed quickly, which means consumers will need to move fast to take advantage of the top rate deals in case providers pull them or worsen the rates to deter investors. If savers sit on the fence too long, they may well miss out on the fresh competition we have seen in recent weeks.”
Find out what the top-paying accounts that are able to currently match or beat inflation by reading the rest of this story online or check out our savings accounts comparison tables.
*Data note: Please note that these savings product numbers only include deals that are available to all UK residents (no notice/easy access, notice, fixed rate bonds, variable or fixed ISAs) and excludes regular savers and children’s savers (this figure does not count each interest payment option for each account), based on a £10,000 deposit. Higher rates may be available for larger deposits.