Savers are £80 billion worse off than they were five years ago, says a Sunday Times report, because inflation has been higher than the interest paid on savings accounts.
In 2010, Britons held £729 billion in savings accounts, and it has earned under 1% interest a year while over the five years to 2015 inflation has been a cumulative 20%. That means that collectively, savers are £80 billion worse off – which averages £3,000 per saver.
Inflation is a stealth tax, and remains the biggest enemy of savers and investors. Longer life expectancy means that even a 2% inflation rate means your standard of living is likely to be seriously reduced unless you get a return on your money at least equal the rate of inflation after paying tax.