Inflation and the silver lining for savers

Thursday, 18 June 2015
So, latest figures show that inflation has risen for the first time since October last year, pulling it out of negative territory and meaning average prices are now just 0.1% higher than they were a year ago. This slight increase has been welcomed by economists as it’s the highest inflation level seen since January this year, marking a notable rise from last month’s rate of -0.1%, and you can benefit…  

All accounts will beat it!

Not only can you take heart from the fact that the cost of living isn’t rising too much – hopefully you’ll be feeling some of the benefits – but as an added bonus, all you careful savers out there will be pleased to know that every single savings account on the market pays a rate that will beat it!

There are currently 872 accounts for you to choose from, and of these, 681 are open to everyone (they’re not limited to high net worth individuals or local residents, for example). This figure is made up of easy access accounts, notice deals, fixed rate bonds and cash ISAs so there’s something for all savings requirements, and all of them offer inflation-beating rates.

Don’t get too excited…

Sounds good, right? Well, yes, but unfortunately, it’s probably too good to be true. We may be in an environment where it’s easier than ever to secure real returns – for a bit of context, this time last year just 187 accounts on the market could beat inflation, and in June 2013 absolutely none could do it – but that doesn’t mean the returns on offer are actually decent. Bar some slight glimmers of hope in recent weeks, savings rates have been on a general downwards spiral for years, and by all accounts, they aren’t going to rise any time soon.

Our very own Rachel Springall, finance expert at Moneyfacts, points out that the best easy access account on the market currently pays 1.50%, but three years ago you could easily get double that. “Today you would need to fix for five years to get anywhere close,” she said, “and worse still, the majority of providers are cutting rates. Since the start of June, only eight providers raised rates on their savings deals, compared with 11 who reduced them”.

Get more from your money

OK, it isn’t sounding good, but we don’t want to be too negative about the whole thing. The silver lining is this: thanks to inflation being so low, the value of your savings won’t be eroded for the foreseeable future, so it’s time to make the most of it! We know that you don’t just want an account that can beat inflation, you want to smash it, so take a look at the top-paying accounts across the market to see if you can benefit.
  • Top fixed rate ISA
AER Notice / Term Min Invest Transfer In Account Opening

Online 5 Years Cash ISA Fixed Deposit
2.50% 5 Year Bond £15,000 Yes Online
  • Top variable rate ISA
AER Notice / Term Min Invest Transfer In Account Opening

Notice Cash ISA
2.02% 120 Day £250 Yes Online
  • Top fixed rate bond
AER Notice / Term Min Invest Account Opening

Fixed Rate Savings Account
3.30% 5 Year Bond £10,000 Online
  • Top bonus-free easy access account
AER Notice / Term Min Invest Account Opening

Freedom Savings Account
1.50% None £100 Online
  • Top notice account
AER Notice / Term Min Invest Account Opening

120 Day Notice (Issue 13)
1.86% 120 Day £1,000 Online

Information & Rates correct as at: 16.06.2015