Moneyfacts highlights impact of inflation on savings accounts

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Moneyfacts highlights impact of inflation on savings accounts

Wed 17th Nov 2010

Savers should be wary of how inflation affects the value of the money they have put aside, according to Moneyfacts.

Spokesperson for the company Darren Cook described inflation as a "stealthy enemy", since it causes the spending power of cash to be quietly eroded away.

"It is difficult for savers, at best they should try to stay within an arm's length of inflation and try to weather the storm of low rates and high inflation," he said.

Mr Cook stated that the average interest rate on instant access accounts is 0.79 per cent, with basic rate taxpayers needing to find a product that delivers a return of four per cent to maintain the spending power of their capital.

He made these comments after it was announced the consumer price index went up to 3.2 per cent in October, with petrol prices, financial services and games, toys and hobbies named as significant drivers of the rise.

The figure stood at 3.1 per cent for September.

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