Inflation remains barrier to saving

The slight monthly fall in the Consumer Prices Index of 0.1% will make little difference to savers struggling to keep a value on their money.

Basic-rate taxpayers need returns of at least 3.88% on savings to stop their value being reduced, once inflation and tax are accounted for.

Those on higher tax rates must earn at least 5.17% interest to keep their savings from dropping in value.

Just 87 of the 1,244 savings accounts on the high street provide 3.88% or higher. Most people need to leave their savings untouched for between three and five years to see any earnings from these kinds of rates.

Higher-rate taxpayers have a choice of just four savings accounts with high enough interest rates, although even two of these have limits to the amount which can be saved. And the other two can only be used if combined with some other investment product.

However the annual ISA allowance may offer a lifeline for earning because interest from these types of accounts is not taxable. ISA savers need a rate of 3.1% to break even.

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