Savings accounts give 'no return on investment'

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Savings accounts give 'no return on investment'

Interest rates on savings are, on average, at just 0.81 per cent, which is hardly above the Bank of England base rate, according to Moneynet.co.uk.

Recent inflation figures have revealed that the average interest on a no-notice savings account is minus 1.25 per cent, when basic tax and inflation are taken into consideration.

Darren Cook, spokesman for Moneyfacts.co.uk, said that while low inflation rates have been engineered to encourage people to spend more and rejuvenate the economy, it does not help those who depend on their savings to supplement their income.

He added that many pensioners, who do not have mortgage repayments and use their interest to top up their pensions, "are seeing their savings being eroded on average by 1.25 per cent, per year, for a basic rate taxpayer and 1.41 per cent for a higher rate taxpayer".

This news comes after Moneynet.co.uk recently reported that 62 per cent of the changes it has seen in the last month to savings products have been withdrawals from sale.

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