Consumer Price Index Rise Hits UK Savers Pockets
Released
on: December 23, 2009, 5:00 am
Author:
Heath Amanda
Industry: Financial
With bank rates predicted to stay low for the next 12 months,
savers are in an increasingly tricky situation, according to personal
finance website MoneyStand.co.uk.
As the Consumer Prices Index (CPI) is often greater than the savings account
interest rates, MoneyStand.co.uk believes some individuals are actually poorer in
real terms by keeping money in certain accounts. The UK website, which focuses on
giving advice and information on personal finance, debt solutions, and IVA, has stated
that simple and well thought out decisions can make all the difference to consumers
in these instances. These are particularly testing times for those who live off the
interest of their accumulated wealth to subsidise their pension.
Due to the low interest rates affecting most banks within the UK and the erosive
affects of rising inflation, individuals with savings are feeling the brunt of the
economic downturn. Even with substantial savings, British savers are missing out on
a solid return on their investments once tax is taken into account.
With the Consumer Prices Index rising to 1.9 per cent, basic rate taxpayers need
their banks to provide a minimum savings rate of 2.375 per cent before seeing any
real return on their investments, and higher rate tax payers need a sizeable 3.166
per cent to see a return. In reality, currently only 9 out of 744 variable rate
savings accounts available in the UK actually offer an interest rate higher than
this. Compared with November, when 69 out of 744 accounts paid above this rate,
experts argue that banks are profiteering at the expense of their customers, warning
that the situation will now get even worse for the basic rate taxpayers.
Following a widespread media campaign for better deals for UK savers, the UK
government has promised to start taking action against these low yield savings
accounts. Despite these claims, Moneystand.co.uk suggests that UK individuals will
soon have almost no reason to save.
Founder Matt Spencer said, “Due to the worsening interests rates offered by the
banks, we have approached the stage where taxpayers are better off investing their
money into gold bullion than they are with savings accounts.”
“Due to the Consumer Prices Index rising beyond economists’ expectations from 1.5
per cent to 1.9 per cent last month, basic rate taxpayers will also feel the knock
on effects of the increase for some months to come. Economists have attributed this
to amongst other things, rising fuel and energy costs.”
Personal Finance weblog MoneyStand.co.uk has been providing unbiased personal
finance, IVA and debt related information since early 2008 specifically to help
people through these testing financial times. The authors realise people are facing
particularly pressing financial times and seek to alleviate this where possible by
providing clear and easy to understand information.
“In times of recession individuals and families often overlook simple financial
decisions that can make huge differences to their financial health.” Matt Spencer
explained, “Our aim is to highlight and offer financial advice on these sensitive
topics.”
For the latest financial news and advice on IVA, debt and insolvency visit our
personal finance blog, http://www.moneystand.co.uk.
Contact Details: Heath Amanda
Wellington House,
8 Upper St Martin's Lane,
London,
WC2h 9DL
moneystand@gmail.com
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