UK SAVERS have seen the purchasing power of their savings lose £80bn since 2010, Henderson Global Investors said today.
Since then, interest rates paid on cash savings have been outstripped by inflation. Around half of the UK’s collective wealth, or £729bn, is invested in cash accounts, with the overall average interest rate paid on this reaching just 0.97 per cent over the last five years.
Meanwhile, inflation between 2010 and 2014 as measured by the retail price index was 19.8 per cent. While around £36bn of interest was earned by savers on their cash deposits in that period (before tax was deducted), inflation consumed close to £116bn of value, leaving a net loss in real terms of £80bn. “Our research shows you can be near certain you will lose money over the longer term by putting your savings in cash accounts, as the cost of living, and expectations for living standards will quickly climb out of reach,” said Henderson’s James de Sausmarez.