Less than a quarter of savings accounts are offering interest rates high enough to stave off inflation, research from moneysupermarket.com has claimed.
Earlier this week, the rate of CPI inflation rose from 1.1 per cent to 1.5 per cent, meaning that basic rate taxpayers will need a savings account interest rate of at least 1.87 per cent to gain benefits in real terms, the rate required to make a difference increases to 2.5 per cent for higher rate taxpayers.
According to the research, it is easy access savings accounts that have been the hardest hit, as just 15 per cent pay a rate of 1.875 per cent or more.
Commenting, Kevin Mountford, head of banking at moneysupermarket.com said: "Regular savings accounts are looking more attractive at the moment, with over half of the products available set to give customers a real return on their cash.
"Cash ISAs are also offering good value for money at the moment but, in all, savers need to be wary that almost three quarters of products will fail to give a true return to savers."
Interest rates on savings accounts have been creeping down gradually, ever since the Bank of England slashed Base rate to 0.5 per cent back in March. Mr Mountford adds:
"We expected to see savings rates creep down before the end of the year, but if rates go any lower then savers will find it almost impossible to beat inflation.
"Anyone taking out a new deal should look for the highest return on terms that suit them, otherwise as the economy stabilises we might see inflation creep up even more and bite away at those interest rates.
"I would urge savers to be more attentive than ever to ensure they get the best return possible," he added.
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