Most Popular
1. Banking Crisis is Stocks Bull Market Buying Opportunity - Nadeem_Walayat
2.The Crypto Signal for the Precious Metals Market - P_Radomski_CFA
3. One Possible Outcome to a New World Order - Raymond_Matison
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
5. Apple AAPL Stock Trend and Earnings Analysis - Nadeem_Walayat
6.AI, Stocks, and Gold Stocks – Connected After All - P_Radomski_CFA
7.Stock Market CHEAT SHEET - - Nadeem_Walayat
8.US Debt Ceiling Crisis Smoke and Mirrors Circus - Nadeem_Walayat
9.Silver Price May Explode - Avi_Gilburt
10.More US Banks Could Collapse -- A Lot More- EWI
Last 7 days
Stock Market Volatility (VIX) - 25th Mar 24
Stock Market Investor Sentiment - 25th Mar 24
The Federal Reserve Didn't Do Anything But It Had Plenty to Say - 25th Mar 24
Stock Market Breadth - 24th Mar 24
Stock Market Margin Debt Indicator - 24th Mar 24
It’s Easy to Scream Stocks Bubble! - 24th Mar 24
Stocks: What to Make of All This Insider Selling- 24th Mar 24
Money Supply Continues To Fall, Economy Worsens – Investors Don’t Care - 24th Mar 24
Get an Edge in the Crypto Market with Order Flow - 24th Mar 24
US Presidential Election Cycle and Recessions - 18th Mar 24
US Recession Already Happened in 2022! - 18th Mar 24
AI can now remember everything you say - 18th Mar 24
Bitcoin Crypto Mania 2024 - MicroStrategy MSTR Blow off Top! - 14th Mar 24
Bitcoin Gravy Train Trend Forecast 2024 - 11th Mar 24
Gold and the Long-Term Inflation Cycle - 11th Mar 24
Fed’s Next Intertest Rate Move might not align with popular consensus - 11th Mar 24
Two Reasons The Fed Manipulates Interest Rates - 11th Mar 24
US Dollar Trend 2024 - 9th Mar 2024
The Bond Trade and Interest Rates - 9th Mar 2024
Investors Don’t Believe the Gold Rally, Still Prefer General Stocks - 9th Mar 2024
Paper Gold Vs. Real Gold: It's Important to Know the Difference - 9th Mar 2024
Stocks: What This "Record Extreme" Indicator May Be Signaling - 9th Mar 2024
My 3 Favorite Trade Setups - Elliott Wave Course - 9th Mar 2024
Bitcoin Crypto Bubble Mania! - 4th Mar 2024
US Interest Rates - When WIll the Fed Pivot - 1st Mar 2024
S&P Stock Market Real Earnings Yield - 29th Feb 2024
US Unemployment is a Fake Statistic - 29th Feb 2024
U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - 29th Feb 2024
What a Breakdown in Silver Mining Stocks! What an Opportunity! - 29th Feb 2024
Why AI will Soon become SA - Synthetic Intelligence - The Machine Learning Megatrend - 29th Feb 2024
Keep Calm and Carry on Buying Quantum AI Tech Stocks - 19th Feb 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

CPI Inflation 4%, UK Savers Pain Gets Tougher

Personal_Finance / Savings Accounts Feb 15, 2011 - 08:16 AM GMT

By: MoneyFacts

Personal_Finance

Inflation figures released today show the Consumer Price Index (CPI) increased during January from 3.7% to 4.00%.

To beat inflation, a basic rate tax payer at 20% needs to find a savings account paying 5.00% pa, while a higher rate tax payer at 40% needs to find an account paying at least 6.67%.


Basic rate taxpayers can choose from just 23 accounts which negate the effects of tax and inflation, including 21 ISA accounts. There are 21 accounts available to higher rate taxpayers all of which are ISAs. There are no accounts available for any taxpayer that beat RPI at 5.1%.

The average savings interest rate payable to a basic rate tax payer, currently 0.83%, is in effect being eroded by 3.34% per year. To highlight just how average savings rates have struggled to keep up with inflation; savers who invested £10,000 in January 2008 would now have the spending power of just £9,325.

Sylvia Waycot, spokesperson for Moneyfacts.co.uk, said: “The additional hike in CPI largely correlates to the rise in VAT. Whilst this tax on spending does not directly impact on exempt essentials such as food, its indirect effect via higher fuel and distribution costs inevitably drives up all consumables. Those reliant on their savings income will undoubtedly find their level of ‘savings pain’ harder to endure.”

“The rise in inflation will hit those who rely on their savings to supplement their income the most, in particular pensioners.”

“Over the last six months the number of savings accounts that beat inflation for basic rate tax payers has dropped successively from 118 in September to only 23 today, of which 21 are ISAs.”

“Cash ISAs limit the amount of investment and therefore return, which is yet a further hindrance when trying to make ends met.”     

www.moneyfacts.co.uk - The Money Search Engine

Moneyfacts.co.uk is the UK's leading independent provider of personal finance information. For the last 20 years, Moneyfacts' information has been the key driver behind many personal finance decisions, from the Treasury to the high street.


© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in