Savers pay high price for low interest rates

High levels of inflation, which has been kept higher by the Bank’s £325bn quantitative easing programme, combined with low interest rates on savings and current accounts has caused a severe decline in the value of the nation’s savings.

Even traditionally higher interest savings accounts such as ISAs are below inflation, at an average of 2.6 per cent interest per year, accountancy network UHY Hacker and Young said.

As the cost of living continues to rise, money in these types of accounts, or in any account with interest rates below inflation, will actually decline in value monthly, the report said.

Mark Giddens, partner at UHY Hacker and Young said: “Savers are losing a staggering amount of money.”