Inflation 'eroding savings returns'

High inflation has eroded Britons' savings by £36 billion over the past year, according to a new study.

There is a whopping £1.003 trillion held in accounts across the UK, although £110 billion of this is held in accounts which do not pay any interest.

Accountants UHY Hacker Young found that the average return is 1.6% on personal finance investments, which is well down on the recent 5.2% measure on the Retail Prices Index measure of inflation. Even in accounts which have traditionally paid savers higher returns, such as fixed rate bonds or tax-free ISAs, only receive 2.57%.

The collective value of Britons' savings have dropped by £36.45 billion as a result in the past year, once an interest figure of £15.75 billion is taken into account.

Savings are also being hit by inflation on the Consumer Prices Index measure, running at 4.5% in April, cutting the deposits by £29.42 billion.

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