Savings hit by "double whammy"

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Savings hit by "double whammy"

Skipton Building Society has warned that savers will not be getting the income they are used to from their investments in the next few years, as low interest rates and inflation make for poorer returns.

The building society said that savers may see their returns eroded by as much as one third in the coming years if interest rates and inflation stay at their current levels.

According to Skipton's calculations, this would mean that a saver with £100,000 taking a five per cent monthly income will only have £69,242 left in five years time.

Mark Fleet, managing director of Skipton Financial Services, said: "Anyone relying solely on cash accounts for income over the next few years, is going to have to make serious cutbacks or accept that their hard-earned life savings are going to disappear in front of their eyes."

Recent research by Alliance & Leicester suggested that people in the UK are still putting money into savings accounts, despite the low interest rates.

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