Research shows nearly one in five savers are still not beating inflation

Nearly one in five (17%) of savers are still not beating inflation with the rate paid on their main account below the current 2.2% level of Consumer Price Inflation¹, new research² for Investec Bank shows.

The under-25s are most likely to be receiving a rate of less than 2.2% on their savings, the study found with 28% of those aged 18 to 24 failing to beat inflation. By contrast, just 13% of the over-55s questioned are receiving less than inflation on their savings.

Nearly two out of five (39%) questioned say the rate they receive on their main savings account is a competitive 4% or higher. However, one in six (16%) admit they do not know the rate they receive on their main savings account, and over a fifth (22%) say they never check the rate paid on their main savings account, the study found.

Savers in general however are not as focused as they might be on beating inflation – around 40% admit that they do not ensure, where possible, that the rate on their main savings account is above inflation.

Many savers do not regularly check to ensure that the rate they receive on their main account is competitive – around a quarter (24%) admit they only check the rate their cash is earning every three months or more.

David Hunt, Head of Retail Savings at Investec, said: “Inflation has dropped quickly throughout this year, so it is understandable that many savers have not checked that they are beating inflation.

“However, with inflation at 2% the Bank of England has started cutting the base rate. Savers could benefit from paying more attention to the rate they are receiving on their savings so that it is competitive with others in the market.

“It is worth taking some time to check the market and switch accounts to new providers if the rate you are receiving does not match other accounts available.”

The bank offers a range of accounts, which do not have any penalty fees or hidden bonus rates, including its Online Flexi Saver and Fixed Rate Saver offering 1-Year, 2-Year or 3-Year terms.  The Online Flexi Saver is a simple and secure instant access savings account, provides instant access to savings, and allows unlimited deposits and withdrawals to a linked current account.

The Fixed Rate Saver provides simplicity and security for savers. Interest is paid on maturity on the 1-Year and annually on the 2-Year and 3-Year. No withdrawals are permitted until the end of the term, and no further deposits can be made after the first seven days. 

Investec’s Online Flexi Saver is a simple and secure instant access savings account. It pays an interest rate of 4.60% AER^* monthly on balances of between £5,000 and £250,000, provides instant access to savings, and allows unlimited deposits and withdrawals to a linked current account.

The Investec 90-Day Notice Saver pays 5.05% AER^* on balances of between £5,000 and £250,000. It also offers unlimited deposits with withdrawals subject to a 90-day notice period.

¹ Consumer price inflation, UK - Office for National Statistics
² Investec Bank commissioned Viewsbank to survey 1,106 adults aged 18-plus in June 2024. The sample represented the demographic profile of the UK. Some 82% or 903 people surveyed said they have one or more savings accounts.
^* AER stands for the Annual Equivalent Rate and illustrates what the interest rate would be if interest was paid and compounded once a year. The AER is intended to be an indicative rate to help you compare the return on different savings products.