Thursday 17 February 2011

Savers make losses of £400 per year beacuse of Inflation

Savers are effectively losing £400 a year due to the rising cost of living, new figures have revealed.
Official figures showed the Government’s preferred measure of inflation, the Consumer Prices Index, rose to 4 per cent in January amid higher oil prices and the increase in Value Added Tax.
The rise means a basic rate taxpayer with £10,000 in a typical instant access savings account paying just 0.67 per cent earns £53.60 a year net, but effectively loses £400 once inflation is taken into account. It produces a total net loss of £346.40 in a year.
For a higher rate taxpayer, the net loss is equivalent to £359.80, according to the calculations by personal Moneynet. Savers have seen a better rate of return on Individual Savings Accounts, where the average interest rates have risen to 2.34 per cent, the highest since January 2009.
But experts warn that the increases are of little comfort to savers at a time when inflation is rising at such a fast rate. .

No comments:

Post a Comment