Why are 8 out of 10 savers losing money in the UK?

Certain people believe that the low interest rates throughout 2009 have helped consumers put their extra cash into savings and it’s true to say that people with existing mortgages before the recession hit, now have a more disposable income, but what is the reality on savings in the UK?

With the inflation increase to 1.5% from 1.1% we should all be making more money on our savings but, in reality, we’re losing more.  Why? 

Well, when you stash your extra cash in what you believe to be a good savings account, the money you make is not just based on the interest rate.

You need to factor in inflation and then deduct the tax you owe before you can conclude a profit.  The higher inflation, the less your extra cash will be worth to you later on and the higher the interest rate would need to be to counteract this and compensate you, the saver.

After years and years of consistently deflated savings rates the majority of savings accounts are costing us money and, if you are a high rate tax payer, that will be even more than you anticipate, even factoring in those two criteria!

What can you do about it?  Shop around for other safer savings investments like property to let.

 
After all, property can only go up as “they don’t make land anymore” as one of my mortgage advisors told me!