The latest inflation figures should serve as a warning to people with money in savings accounts, one expert has stated.
David Black, principal consulting of banking for Defaqto, explains that with the Retail Price Index at 4.6 per cent, basic rate taxpayers need a gross return of 5.75 per cent from a savings account to avoid their money being eroded.
High rate taxpayers need a return of 7.67 per cent to achieve the same result, he pointed out.
Mr Black said: "There are currently only twelve accounts - excluding cash individual savings accounts (Isas) and the NS&I Index Linked Savings Certificates - that will provide a real rate of return to an adult higher rate taxpayer."
Because of this, people should make sure they are using their annual Isa allowance, he added.
Earlier this week, Matthew Carter, director for savings at Nationwide, stated that having money put away is vital for helping people through tough economic times.
Inflation warning over savings accounts
Inflation warning over savings accounts
Thu, 17 Jul 2008
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