UK Savings Rates Lag Behind Inflation

According to the news article published by Which?, UK-based independent consumer group, the official rate of CPI inflation exceeds the saving rates offered by most UK banks.

This means that the purchasing power of money put into savings accounts falls. Financial experts are determined that those who want to not only stop this process but also to earn some money, should look for savings deals offering 5.5% before tax or 4.1% post-tax.

At the moment, inflation in UK is higher than that in the European Union (3.3% and 2.3% respectively).

The best option, in the opinion of Which? experts, is to make the most of tax-free ISA allowance. This way, savers can get up to 4.1% when locking their money for 4-5 years or 3.7% when locking for 3 years.

If you want to see, which UK banks offer competitive saving rates on ISAs, consider using Which? website or other online comparison sources. The good news is that the Moneyfacts team reported on December 15th that “savings rates in the last six months have been slowly rising, with easy access rates at their highest level since June 2010.”