Your cash savings are going backwards. Savers' returns continue to make grim reading, with little prospect of interest rate rises for the foreseeable future. Danny Cox, head of advice at Hargreaves Lansdown, looks at the options for investors during periods of low interest rates and high inflation
If you can eke out 3 per cent interest before tax on immediate access cash accounts you are doing remarkably well. Against this, rising food and fuel prices are stoking retail price inflation (RPI), currently at 5 per cent (source ONS: July 2011). Therefore, the value of your cash is going down in real terms.
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