UK savers benefit from falling inflation
The Bank of England has announced that inflation has dropped from 3.5% in April to 3%, which is a significant boost for UK savers.
According to a money comparison site, as a result of a drop in inflation, 46 separate saving accounts have now beaten inflation.
Kevin Mountford, a banking expert, said: "The fall in inflation is great news for hard pressed savers, particularly after the increase we saw in April, and this should really help encourage people to start saving again.”
An account paying a minimum of 3.75% is needed by basic rate tax payers to beat inflation as this will mean they benefit in real terms from their savings. There are 15 cash ISAs and 31 fixed rate bonds available for basic rate tax payers that wish to beat inflation.
Higher rate tax payers will need an account paying approximately 5%, although it will be a struggle as there is just one account available to conquer inflation, while 50% tax payers will need an increase to 6%.
"High inflation combined with low interest rates has made it a tough environment for UK savers who have found it very difficult to gain any real returns on their savings pots.
“With this dramatic fall in inflation, there is a welcome boost in the number of savings accounts which now beat inflation, and consumers need to make sure they are on the best deals possible to maximise their returns,” added Mountford.
Households are being encouraged to review their finances on a regular basis in order to establish successful ways to maximise their income.
If you want to see how you could benefit from your savings bank account, compare the market to see which account suits your financial requirements most appropriately.