Soaring energy bills and rising food prices have driven inflation over 5% in the month of September, causing more misery for savers. The retail price index (RPI) has risen to a 20-year high. So, what now for savers who are set to lose out considerably in real terms?
It has been estimated that savers at the basic level of tax would need to be investing at a rate of at least 6.5% to avoid losing out in real terms, and greater still for higher rate taxpayers. However, the low base rate set by the Monetary Policy Committee to aid growth is leaving very few products available at a percentage that can offset the high inflation rate.