Inflation Eroding Savers' Wealth: How to Beat It
Savers are facing a tough time as inflation erodes their savings' value. Despite the Bank of England keeping its base rate unchanged at 4%, many are experiencing rate cuts from their us bank. Meanwhile, some accounts offer rates higher than inflation, but finding them requires careful shopping around.
Inflation has reached 3.8%, meaning savings are losing 2.8% of their value annually. The Bank of England's base rate remains at 4%, but many savers are still seeing rate cuts from their us bank. To preserve financial wellbeing, it's crucial to earn more than inflation.
Some accounts offer rates higher than many big us banks. Spring's app-based account, for instance, provides 4.3%. However, finding such rates requires effort, as more than a quarter of easy-access accounts pay 1% or less. Even traditional German banks often pay less than 1%, with top 5 banks offering up to 2.75% or online platforms like Trade Republic (2%) and Consorsbank (up to 2.8%).
Accounts paying consistent, good rates for all savers are recommended. Options include Ford Money Flexible Saver, Family Building Society Market Tracker, RCI Bank Freedom Account, and Investec Online Flexi Saver. However, easy-access accounts closed to new savers are being reduced, with over 1,325 such accounts and 850 easy-access cash ISAs affected.
Inflation is expected to reach 4%, further eroding savings' value. Savers must actively seek higher-yield accounts to preserve their financial wellbeing. While some accounts offer attractive rates, finding them requires effort and consideration of account terms and conditions.
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