Abbey Savings: Savers need to 'inflation proof' themselves

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Abbey Savings: Savers need to 'inflation proof' themselves

Wed 22nd Oct 2008

A third of savers need to increase their monthly deposit to account for inflation, Abbey Savings has said.

According to new research from Abbey, 35 per cent of regular savers have not increased the amount they put aside in the last 12 months to consider inflation.

The average regular saver sets aside £194 each month, or £2,328 a year, Abbey has found. To maintain the capital in real terms, with inflation's effect, this needs to be increased by five per cent to £2,444.40 a year.

This means a monthly increase of £53.40 to £78.60, depending on the saver's tax band.

Reza Attar-Zadeh, director of savings and investments at Abbey, advised people to review their savings regularly and increase payments if necessary to ensure they are "inflation proofing their capital".

Yesterday, Standard Life urged businesses to make better use of their savings to maximise on the best interest rates available.

It said many firms are losing out by not using a business savings account.

Some had money in accounts paying less than two per cent, while business savings accounts often offer rates of more than five per cent.

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