The new year has brought the same old problems for savers as they continue to struggle to find accounts which keep up with the rising cost of living.
Just 288 savings accounts match or beat the latest consumer prices index after it increased to 0.6 per cent in December, according to Savings Champion, down from 703 last month.
Just eight interest-paying current accounts, seven easy-access deals and 10 instant-access tax-free Isas currently pay at least 0.6 per cent after the nearly 60 per cent fall in the number of inflation-beating deals.
Inflation-beating savings deals continue to disappear as rates fall and the cost of living rises
The consumer prices index measure of inflation rose from 0.3 per cent in November to 0.6 per cent in December on the back of rising clothes prices and higher transport costs.
But while inflation has risen, savings rates have continued to fall to all-time lows.
While they have not fallen by very much over the last month, the highest-paying easy-access account available to everyone in This is Money’s best buy tables is just 0.5 per cent from Aldermore Bank.
This time last year the best easy-access rate paid 1.41 per cent, nearly three times as much.
Separate figures from Moneyfacts found that 331 savings accounts matched or beat inflation this time last year, when December 2019’s consumer prices index was more than double 2020’s at 1.3 per cent.
And with the best rate in our best buy tables paying 1.5 per cent from Gatehouse Bank, even locking money away for five years would not be enough to surpass the rising cost of living if inflation returned to the Bank of England’s target of 2 per cent.
‘Savers looking for a reasonable return on their cash and to combat the eroding effects on inflation will find the top rates have remained relatively stable month-on-month but are in stark contrast to what was on offer a year ago’, Moneyfacts’ Rachel Springall said.
But even though rates remain at historic lows, savers with money to stash away will still see a difference if they move their cash away from Britain’s biggest banks.
None of Barclays, HSBC, Lloyds Bank or NatWest pay 0.6 per cent on any of their easy-access accounts or fixed-rate bonds or Isas and all pay as little as £1 interest on £10,000 of savings.
By contrast, a saver can earn 50 times as much with Aldermore Bank.
Those looking for a better home for their savings should look at This is Money’s best buy tables for the top deals and check the Financial Services Compensation Scheme to ensure their money up to £85,000 is protected.
#bcaTable h3,#bcaTable p {margin: 0; padding: 0; border: 0; font-size: 100%; font: inherit; vertical-align: baseline;}
#bcaTable {font-family: Arial, ‘Helvetica Neue’, Helvetica, sans-serif; font-size:14px; line-height:120%; margin:0 0 20px 0; padding:0; border:0; display:block; clear:both;}
#bcaTable {width:636px; float:left; background-color:#f5f5f5}
#bcaTable .title {width:100%; background-color:#58004c}
#bcaTable .title h3 {color:#fff; font-size:16px; padding:7px 8px; font-weight:bold; background:none}
#bcaTable .item {display:block; float:left; margin-bottom:10px; border-bottom:1px solid #e3e3e3; margin:0; padding-bottom:0px; width:100%}
#bcaTable .item#last {border-bottom:0px solid #f5f5f5}
#bcaTable .copy {padding:7px 10px 7px 10px; display:block; font-size:14px}
#bcaTable a.mainLink {display:block; float:left; width:100%}
#bcaTable a.mainLink:hover {background-color:#E6E6E6; border-top:1px solid #e3e3e3; position:relative; top:-1px; margin-bottom:-1px}
#bcaTable a.mainLink:first-child:hover {border-top:1px solid #58004c;}
#bcaTable a .copy {text-decoration:none; color:#000; font-weight:normal}
#bcaTable .copy .red {text-decoration:none; color:#de2148; font-weight:bold}
#bcaTable .copy strong, #bcaTable .copy bold {font-weight:bold}
#bcaTable .footer {display:block; float:left; width:100%; background-color:#e3e3e3; margin-bottom:0}
#bcaTable .footer a {float:right; color:#58004c; font-weight:bold; text-decoration:none; margin:10px 18px 10px 10px}
#bcaTable .mainLink p {float:left; width:524px}
#bcaTable .mainLink .thumb span {display:block; float: left; padding:0; line-height:0}
#bcaTable .mainLink .thumb {float:left; width:112px }
#bcaTable .mainLink img {width:100%; height:auto; float;left} #bcaTable .article-text h3 {background-color:none; background:none; padding:0; margin-bottom: 0}
#bcaTable .footer span {display:inline-block!important;} @media (max-width: 670px) {
#bcaTable {width:100%}
#bcaTable .footer a {float:left; font-size:12px; }
#bcaTable .mainLink p {float:left; display:inline-block; width:85%}
#bcaTable .mainLink .thumb {width:15%} #bcaTable .mainLink .thumb span {padding:10px; display:block; float:left}
#bcaTable .mainLink .thumb img {display:block; float:left; }
#bcaTable .footer span img {width:6px!important; max-width:6px!important; height:auto; position: relative; top:4px; left:4px}
#bcaTable .footer span {display:inline-block!important; float:left} } @media (max-width: 425px) {
#bcaTable .mainLink {}
#bcaTable .mainLink p {float:left; display:inline-block; width:75%}
#bcaTable .mainLink .thumb {width:25%; display:block; float:left} }
