Sticky inflation continues to erode the wealth of many as it exceeds the average return savers can earn, analysis from Moneyfacts can reveal.
The analysis, which follows today’s (July 16) announcement that inflation rose to 3.6 per cent over June, pointed out that the Moneyfacts Average Savings Rate currently sits at 3.51 per cent – lower than inflation.
However, Moneyfacts said there are currently 1,289 savings accounts that beat inflation, spread across easy access, notice accounts, variable rate Isas, fixed rate Isas, and fixed rate bonds.
This is an increase on 2023 as, in July of that year, there were no deals that could beat the then inflation rate of 7.9 per cent.
The latest number does not represent an increase on last year as, in July 2024, there were 1,638 deals that could beat the 2.0 per cent inflation rate.
Moneyfacts spokesperson, Caitlyn Eastell, said: “Today’s inflation figures come as bad news to savers as it now exceeds the average return they can expect on their savings, and many must now act quickly to avoid inflation eroding their wealth.
“Some of the best-paying accounts which include easy access and fixed term accounts pay over 4 per cent, plus the best regular savings accounts, into which you can save smaller amounts each month, are paying around 7 per cent.
“However, today’s best rates shouldn’t be taken for granted. While many top paying rates had improved in the past month, it may be a short-term reprieve — there has also been a harsh cut of almost 1 per cent when looking back at one-year fixed rate bonds this time last year.”
Eastell argued that, for now, the gap between the best variable, short-term and long-term rates is “on a knife edge” which could change quickly.
She explained that some of the best returns can currently be found with easy access accounts, but these rates are variable, and they are liable to be cut if the Bank of England lowers rates, as expected later this year.
tom.dunstan@ft.com
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