UK: Inflation overtaking savings returns

Following the latest UK inflation figures from April, which placed inflation at 2.7%, comparison site Moneyfacts has found that there are now no savings accounts in the UK market, out of the 753 available, that offer inflation beating rates.

According to Moneyfacts, the highest savings account rate offered is from Paragon at 2.25% on a five-year fixed bond. Some current accounts offer interest rates above 2.7%, however, these tend to have limitations on them, such as a ceiling on the deposit value that can earn the leading interest rate, or requirements for a minimum number of direct debits to come out of the account.

On average consumers believe that they are earning 1.3% on their savings accounts, with those holding a Stocks and Shares ISA receiving the best rates at 2.5% on average.

According to RFi Group UK Savings Council data from early 2017, on average consumers believe that they are earning 1.3% on their savings accounts, with those holding a Stocks and Shares ISA receiving the best rates at 2.5% on average.

With the latest inflation figures only recently released, banks may still respond with higher rates to try to match or beat the latest inflation rate.


Source: RFi Group UK Savings Council 2017 Q1

map4
Subscribe to receive insights delivered straight to your inbox
Latest news, unbiased expert analysis and insights across banking and finance