Savers hammered as inflation destroys return on investments

SAVERS will be looking to chancellor George Osborne to give support to personal investments in the Budget today, after the latest inflation figures showed that UK savings accounts are all losing money in real terms.

There are no individual savings accounts (ISAs) available that beat February’s 20-year high inflation rate of 5.5 per cent rate under the retail price index, according to Moneyfacts.co.uk.

Just eight ISAs, all on fixed rates, can compete with the consumer price index rate of 4.4 per cent, the comparison website adds, making it particularly difficult for those supplementing their income with savings.

Higher rate earners paying 40 per cent tax would need a savings account that paid out 7.3 per cent interest per year to make up for the higher than expected inflation hike.

“Over the last six months the number of savings accounts that beat inflation for basic rate taxpayers has dropped successively from 118 to only eight today,” said spokesperson Sylvia Waycot.