Those of us who have been trying to get the most out of every pound during these rough economic waters will undoubtedly be relieved to hear that their savings accounts are in a bit better shape; inflation in the UK has trended downward for two months straight, according to official figures released recently.
The Office for National Statistics did indeed confirm that inflation, measured by the Consumer Price Index, decreased to 3.2 per cent in June. This is down from May’s CPI rate of 3.4 per cent. This drop has been attributed to a recent reduction in the cost of fuel and clothes.
According to information found on Moneyfacts.co.uk, a reduction in the inflation rate now means that a taxpayer on basic rates must locate the most ideal high interest savings accounts in order to avoid their savings being effectively eroded by inflation. In order to do so, studies have shown that it is most beneficial to select a savings account with an interest rate of 4 per cent at a minimum.
Those of us in higher tax brackets are less fortunate; in order to offset your taxes, the interest rate you’ll need on your savings account is 5.33 per cent at a minimum, which may be quite difficult indeed.
Though some research has indicated that fixed rate bonds may be more prevalent in comparison to savings accounts, basic rate taxpayers are in luck; research has shown that there are at least 47 high interest savings accounts available in the UK currently, ready to aid you in your quest to “get the most bang for your buck,” as the colonists say.
Fixed rate bonds do indeed offer attractive interest rates, as to ISA savings accounts, and are worthwhile subjects for further research. Experts stress the merits in conducting close examination of all your options before making any decisions with your hard-earned money, especially in the current economic climate.