Savers still struggling to beat inflation

A greater number of individuals than usual may be interested in making use of wealth management practices at present, including SIPPs and so on, because of the unfavourable interest rates on traditional savings accounts. The Bank of England’s base rate remains low, meaning those who simply deposit surplus money into regular savings solutions are struggling to maintain the buying power of their wealth. This issue is being compounded by higher than average inflation.

Drawing attention to this issue, Which4U pointed out that a basic rate taxpayer needs to achieve a return of 5.25 per cent gross interest per year in order to avoid losing out in real terms, while a higher rate taxpayer would require an account paying over seven per cent.

The news source stated: “The degree of the real term losses suffered by savers becomes evident when considering that the average easy access savings account currently returns less than one per cent, while the average easy-access cash ISA … pays only 0.53 per cent.”

It went on to claim that only growth ISAs and wealth management plans offer any chance of attaining real earnings for savers.

However, it pointed out that these are long-term products that come with an element of risk.

Thankfully, anyone considering investing in SIPPs and other such products can now access all the help and advice they need from specialists in the field. This means they can reduce their exposure to risk and they stand a much better chance of achieving the results they desire.

Meanwhile, in positive news for consumers, Which4U noted that inflation is finally starting to come down, which should make their lives easier and help them to accrue a greater level of savings. Slight falls in energy prices announced earlier this year were identified as contributing to the decline in inflation.

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