A large proportion of savings accounts are not providing savers with a 'real return', Moneynet.co.uk has revealed.
Following the Bank of England's decision to keep the Base Rate at 0.5 per cent and with CPI now back up to 1.5 per cent, Moneynet.co.uk has revealed that a basic rate taxpayer would need to secure a rate of around 1.87 per cent gross to maintain a positive return on their savings.
Following a review of all the savings accounts on the market today, with the exception of ISAs and fixed rate bonds, more than 78 per cent of variable rate accounts are paying a rate of 1.87 per cent or less.
Meanwhile, it appears higher rate taxpayers are the most likely to have an account paying effectively no interest, with 90 per cent having accounts that pay less than the 2.5 per cent gross rate required.
Commenting, Andrew Hagger, spokesman at Moneynet.co.uk, said: "With inflation rising sharply, savers need to check their rate to ensure they're not losing out - anything less than 1.87 per cent for a basic rate taxpayer and the value of their cash is being eroded.
"The message is clear, don't let your savings languish in a sub standard account, you may have to move your emergency or rainy day fund to an account offering a 12 month bonus and then switch away when the bonus falls away."
Mr Hagger continued by urging savers to "make full use of their ISA allowance" to get "a real return" on the bulk of their savings and also "take advantage of the better rates on offer in the fixed rate bond market."
© Fair Investment Company Ltd