New data from Moneyfacts has revealed that the rise in inflation at the end of April means that by the end of May no savings accounts on the market offered a real-term return as they were beaten by the new rate of inflation.
The latest data from the Office for National Statistics (ONS) shows that the consumer prices index measurement of inflation registered 1.5 per cent in April – double the amount recorded in the previous month.
Due to the sudden jump, savers now seem to be left with fewer options to beat the rate, with the top-paying easy access account from Atom Bank only enjoying a rate of 0.5 per cent, which means a real-term loss for account holders.
Even those willing and able to lock money into an account for up to five years were not able to beat the rate of inflation, according to the report, with the best account from Gatehouse Bank offering a rate of just 1.4 per cent – 0.1 per cent lower than the rate of inflation.
Unfortunately for many, the situation is unlikely to improve, as inflation is now predicted to rise to 2.3 per cent by the second quarter of next year, as the UK recovers from the pandemic.
Experts say that it is unlikely that any banks or building societies will be able to match this with competitive interest rates, due to the Bank of England base rate remaining so low.
The sudden loss of effective saving options stands in stark contrast to May 2020, when 376 savings deals beat inflation, according to the Moneyfacts’ figures.