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Last updated on April 25, 2014 at 1:22 EDT

Inflation Remains Stubbornly High as Savers Continue to Feel the Pain

December 18, 2012

CHESTER, England, December 18, 2012 /PRNewswire/ –

        - Basic rate taxpayers need a rate of 3.39 per cent to gain benefit in real
          terms, increasing to 4.51 per cent for higher rate taxpayers
        - Only 35 savings accounts now beat inflation

Today’s announcement by The Bank of England that The Consumer Price Index (CPI)
remained stubbornly high at 2.7 per cent, will be a cold blow for savers and means
searching for the best savings rates is vital to ensure they are maximising their returns,
according to MoneySupermarket [http://www.moneysupermarket.com/savings ].

To beat inflation, basic rate tax payers will need an account paying at least 3.39 per
cent to gain benefit in real terms from their savings, increasing to 4.51 per cent for
higher rate tax payers, and 5.41 per cent for 50 per cent tax payers.

For basic rate tax payers there are only four Fixed Rates Bonds, and 16 regular saver
accounts that beat inflation. For higher rate tax payers only seven regular saver accounts
beat inflation. On tax-free ISA accounts, only 10 easy access ISAs and five fixed rate
ISAs beat inflation.

Kevin Mountford, head of banking, at MoneySupermarket.com
[http://www.moneysupermarket.com/savings/calculator ], said: “Today’s news that inflation
has remained high at 2.7 per cent after last month’s increase is a further blow to savers
and struggling UK households, and is a bitter pill to swallow for those planning to make
savings goals a big part of their New Year resolutions for 2013.

“It is important savers don’t give up or get put off, and prepare to switch if they
are not currently on the most competitive deal. There is a significant difference between
the average and top paying rates, and moving to a better deal can go a long way to help
savers limit the impact of inflation on their pots.

“Only a handful of savings accounts currently beat inflation. As we approach the start
of Tax Year end season, for savers, using products such as Cash ISAs to take advantage of
the tax free benefits is a must. However, even if you cannot find an account that beats
inflation, consumers need to make sure they are on the best deals possible. Savers should
also consider looking at alternative products such as offsetting savings against mortgage
borrowing, peer-to-peer lending, or structured savings products.”

Notes to Editors

MoneySupermarket.com compares (at 29th November 2012)

        - 130 car insurance brands and 99 home insurance brands
        - 9 broadband providers and 20 energy providers
        - 30 unsecured loan and 5 secured loan providers
        - 62 mortgage lenders and 27 credit card providers
        - 63 savings providers and 38 current account providers.
        - Over 920,000 mobile phone deals

Our customers

We help our customers to save money on all of their household bills by providing a
free, easy to use online service so they can compare a wide range of products in one place
and find the product most suited to their needs. Our size means we are able to offer our
customers exclusive, market-leading deals, including some they can’t even get direct from
providers.

Our providers

By having considerable volumes of informed customers actively looking for products and
ready to purchase, we offer our providers an efficient and cost effective customer
acquisition solution across all of our channels. This enables our providers to target
their marketing spend in an effective and completely measurable way.

Our revenue comes predominantly from fees paid to us by product providers when a
customer clicks through to their website and actually applies for or purchases a product.
It is a success based marketing fee.

Our customer commitment

        - We make it easy to find the brands you expect to see
        - We strive to ensure a product cannot be found cheaper by going direct
        - We let you remain in control of your personal data
        - We are independent and impartial
        - We make it easy to switch and save
        - We strive to always show the most competitive product available

        Paul Lawler/ Nicki Parry
        MoneySupermarket.com
        +44-(0)787-237-9545 / +44-(0)1244-370-318
        Paul.lawler@moneysupermarket.com / nicki.parry@moneysupermarket.com

SOURCE moneysupermarket.com


Source: PR Newswire