With inflation hitting 4.4 per cent people must be aware of the effect it is having on their savings, one expert has warned.
Michelle Slade, analyst at Moneyfacts.co.uk explains that if someone has a savings account that offers a rate between 3.3 per cent and 4.14 per cent before taxation - currently the most popular kind of account around - then inflation is actually reducing the amount of money they save .
She said: "Savers can find higher rates on notice accounts and accounts managed online, but even these are not immune from the effects of inflation.
"It is not until savers in these accounts have at least £25,000 invested that the average gross rate is higher that 4.4 per cent."
With inflation set to rise even higher in coming months, people must review their arrangements and switch to a best-buy savings account, she added.
Yesterday, a survey by Nationwide Building Society found that 62 per cent of people are saving less money than they think they need to.
Inflation impacting on savings accounts, expert warns
Inflation impacting on savings accounts, expert warns
Wed, 13 Aug 2008
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