Rising inflation is set to cause more 'misery' for savers according to moneysupermarket.com, with fewer savings deals paying a high enough rate to offset the effects of inflation.
Following today's announcement by the Bank of England that inflation has increased to 3.7 per cent, the price comparison website has declared that 2010 has so far "proved disastrous for savers".
Since the start of the year it has seen the average rate of its top five savings accounts fall from 3.04 per cent to 2.86 per cent.
In light of the latest announcement on inflation, moneysupermarket.com has revealed that basic rate tax payers will now need an account paying at least 4.62 per cent to get a real return on their savings, while a higher rate tax payer will need an account paying at least 6.17 per cent.
Commenting, Kevin Mountford, head of banking at moneysupermarket.com acknowledged that the latest inflation data will be "a bitter blow for savers", but said: "There is a danger that many will do nothing because of the belief that there is little point, but this is not the time to be apathetic."
To avoid saving pots being eroded by inflation he is urging savers to check how much interest their account is currently paying and if necessary switch to a higher earning account, although he accepts that finding an account which can beat inflation is becoming increasingly difficult.
However, he suggests there are ways to limit the impact inflation can have on savings returns.
"It's a no-brainer to utilise your tax free ISA allowance this year and next when the amount you can squirrel away in cash increases to £5,100," he said.
© Fair Investment Company Ltd