The brand-new year has actually brought the same old problems for savers as they continue to have a hard time to find accounts which keep up with the rising cost of living.
Just 288 cost savings accounts match or beat the latest customer rates index after it increased to 0.6 percent in December, according to Savings Champion, down from 703 last month.
Just 8 interest-paying current accounts, seven easy-access deals and 10 instant-access tax-free Isas presently pay at least 0.6 per cent after the almost 60 percent fall in the number of inflation-beating deals.
Inflation-beating cost savings offers continue to disappear as rates fall and the expense of living increases
The consumer costs index step of inflation rose from 0.3 per cent in November to 0.6 per cent in December on the back of increasing clothes rates and greater transportation costs.
However while inflation has increased, savings rates have continued to be up to all-time lows.
While they have not fallen by very much over the last month, the highest-paying easy-access account available to everyone in This is Money’s best buy tables is simply 0.5 per cent from Aldermore Bank.
This time in 2015 the very best easy-access rate paid 1.41 percent, nearly 3 times as much.
Separate figures from Moneyfacts discovered that 331 savings accounts matched or beat inflation this time last year, when December 2019’s customer rates index was more than double 2020’s at 1.3 percent.
Which accounts beat inflation? According to Savings Champ, the following accounts pay a minimum of the CPI of 0.6%: – 8 current accounts – 7 easy-access accounts – 23 notification accounts – 36 bonds with terms of up to 23 months – 46 two-year fixed-rate bonds – 46 three-year fixed-rate bonds – 16 four-year fixed-rate bonds – 34 five-year fixed-rate bonds – 4 seven-year fixed-rate bonds – 68 Isas
And with the best rate in our best buy tables paying 1.5 per cent from Gatehouse Bank, even locking cash away for five years would not be enough to go beyond the increasing cost of living if inflation returned to the Bank of England’s target of 2 percent.
‘Savers trying to find a reasonable return on their money and to fight the eroding impacts on inflation will discover the leading rates have remained relatively steady month-on-month but remain in stark contrast to what was on offer a year ago’, Moneyfacts’ Rachel Springall said.
But although rates remain at historic lows, savers with cash to store will still see a distinction if they move their cash away from Britain’s greatest banks.
None of Barclays, HSBC, Lloyds Bank or NatWest pay 0.6 percent on any of their easy-access accounts or fixed-rate bonds or Isas and all pay just ₤ 1 interest on ₤ 10,000 of cost savings.
By contrast, a saver can make 50 times as much with Aldermore Bank.
Those trying to find a better house for their cost savings ought to look at This is Cash’s best buy tables for the top offers and inspect the Financial Services Settlement Scheme to ensure their money as much as ₤ 85,000 is safeguarded.