Sticky inflation is squashing savers’ real returns on their pots of cash, making it essential for people to shop around, according to a website. The rate of the Consumer Prices Index (CPI) was 3.8 per cent in August, the same as July, according to Office for National Statistics (ONS) figures.
Financial information website Moneyfactscompare.co.uk said the average savings rate, based on market analysis, is currently 3.45 per cent. As the average rate is lower than inflation, it is essential for savers to shop around, to help them avoid losing money in real terms, the website said.
The website’s analysis of cash savings deals on the market found 976 savings accounts that beat inflation – made up of 82 easy access deals, 88 notice accounts, 64 variable rate Isas, 216 fixed rate Isas and 526 fixed rate bonds.
Back in September 2024, savers had a broader choice of CPI inflation-beating deals, with 1,606 available, according to the website’s records.
But the situation for savers is an improvement compared with two years ago, when Moneyfactscompare.co.uk found no cash savings deals that could beat the rate of inflation at that time.
Caitlyn Eastell, a spokesperson at Moneyfactscompare.co.uk, said: “Sticky inflation will no doubt leave many savers disheartened, as the Moneyfacts average savings rate shows real returns remain in the negatives for the third consecutive month.”
She added: “Typically, more attractive returns are offered to savers willing to lock their cash away for longer.
“Depending on their specific savings goal, this may not be for everyone.
“With the future of further base rate cuts being uncertain, some savers may be willing to risk a shorter term so they can access their money sooner.”
On Thursday, Yorkshire Building Society relaunched its popular £50 Regular Saver account for the second consecutive year to mark UK Savings Week, continuing its commitment to helping people build better financial habits.
The account offers a competitive variable interest rate of 6.00 per cent, allowing customers to save up to £50 per month over a 12-month period. Savers can make three penalty-free withdrawals during the term, or withdraw funds if closing the account. It’s available to open in branches, agencies and online.
This initiative supports the goals of UK Savings Week by encouraging people to start and maintain a regular savings habit, helping them build financial resilience and improve their financial wellbeing.
The account was launched last year following research from the University of Bristol’s Personal Finance Research Centre, sponsored by Yorkshire Building Society, which found the benefits of regular saving go beyond finances.
The study found that regular savers are 66 per cent more likely to report high life satisfaction, regardless of income.
Pete Lewis, senior savings manager at Yorkshire Building Society, said: “We’re proud to be supporting UK Savings Week again this year with the relaunch of our £50 Regular Saver. We know how important it is for people to build financial resilience, and we want to help them kickstart a healthy savings habit. This account promotes saving little and often, offers a strong return, and supports people in taking positive action towards their financial goals.
“We want to inspire a save-first, buy-later mindset – helping people put money aside before they spend, so they can reach their goals without falling into debt. Our £50 regular saver offers people a simple, powerful way to take control of their finances and feel good doing so”
